Preamble

The House met at Half-past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

MESSAGE FROM THE KING

ARMY AND AIR FORCE (WOMEN'S SERVICES)

The VICE-CHAMBERLAIN OF THE HOUSEHOLD (Mr. POPPLEWELL) reported His Majesty's Answer to the Address, as follows:

I have received your Address praying that the Army and Air Force (Women's Service) (Adaptation of Enactments) Order, 1948, be made in the form of the draft laid before Parliament.

I will comply with your request.

Oral Answers to Questions — WAR GRAVES (PHOTOGRAPHS)

Mr. Gerald Williams: asked the Secretary of State for War how many photographs of war graves have now been sent to next of kin; and how many are still outstanding.

The Secretary of State for War (Mr. Shinwell): Up to the end of October approximately 185,000. Some 37,000 remain to be sent.

Mr. Williams: Does the Secretary of State realise that these photographs of war graves mean a great deal to relatives, and will he do his best to speed up the remaining 37,000 which have been outstanding for so long?

Mr. Shinwell: Certainly. I have given the matter my personal attention.

Oral Answers to Questions — BRITISH ARMY

Armoured Vehicles, Palestine (Theft)

Mr. Erroll: asked the Secretary of State for War how many armoured fighting vehicles were stolen from the British Forces in Palestine from 1st January, 1947, until the evacuation.

Mr. Shinwell: Information is not available in the War Office for the whole of the period referred to in the Question. Between June, 1947, and June, 1948, 11 armoured vehicles were stolen from British Forces in Palestine, of which one was later recovered.

Mr. Erroll: Can the Minister say what types of armoured fighting vehicles these were?

Mr. Shinwell: No, I am afraid not without notice.

Mr. A. R. W. Low: Is the right hon. Gentleman doing anything to find out who stole them, and when he does find out will he take suitable action?

Mr. Shinwell: We have some suspicion as to who were responsible for purloining the vehicles.

General Sir George Jeffreys: is not the right hon. Gentleman aware that very substantial allegations of misconduct have been made against British troops in regard to handing over these vehicles? Has that been inquired into, and has any action been taken about it?

Mr. Shinwell: Suspicion is one thing, but I would like to have some evidence.

Officer's Resignation (Documents)

Mr. Price-White: asked the Secretary of State for War why, following his resignation of his commission on 30th October, 1944, Captain H. Kelly, V.C., M.C., late of The Duke of Wellington's Regiment, did not receive his normal Army release documents until 10th December, 1947; whether he is aware of the hardship caused to Captain Kelly in the matter of obtaining civilian employment during the period of delay; and what compensation he proposes to make to Captain Kelly.

Mr. Shinwell: Available records show that Captain Kelly's rehabilitation documents were sent to him at No. 1, High Street, Bangor, on 5th December, 1944. The Department cannot trace any subsequent application from him for them until 4th November, 1947, when he wrote saying that he had received the letter of 5th December, 1944, but that the documents had not been enclosed. If this is true it would be reasonable to expect Captain Kelly to have drawn the Department's


attention to the fact at once and not for the first time nearly three years later. In these circumstances, Captain Kelly has failed to establish any default on the part of the War Department, and the question of compensation does not arise.

Seconded Personnel, Pakistan (Leave)

Sir Wavell Wakefield: asked the Secretary of State for War if he will give an assurance that British Army personnel seconded to Pakistan who are entitled to release leave and overseas leave will not forfeit these rights if they are still under contract to Pakistan when the state of emergency is declared ended.

Mr. Shinwell: This matter is under consideration.

Sir W. Wakefield: Will the Secretary of State give an assurance that the hard-earned rights of these men—because they continued to serve the Commonwealth to advantage—will not be taken away from them?

Mr. Shinwell: I could not give any such assurance. As I say, the matter is under consideration. In the meantime, the question does not arise because release arrangements continue. What might happen subsequently is another matter.

Injured Civilian (Claim)

Mr. J. P. W. Mallalieu: asked the Secretary of State for War why compensation was refused to Miss Florence Prince, of 27, Bland Street, Lockwood, Huddersfield, who was seriously injured by an Army vehicle.

Mr. Shinwell: As already explained to my hon. Friend, the vehicle which injured Miss Prince was being driven on an unauthorised journey. On the grounds that in similar circumstances a private employer would not be responsible in law for the unauthorised acts committed by his servant, my Department is unable to accept liability.

Mr. Mallalieu: Is my right hon. Friend aware that the driver of this vehicle stated on oath that he was on an authorised journey, and is he further aware that this accident has cost the lady all her life's savings? In view of these two facts, will he reconsider this case?

Mr. Shinwell: I am fully sympathetic with the position in which the lady finds herself, but I must repeat that the journey was unauthorised. I have inquired into this matter very carefully because I have sympathy with the lady concerned, as I know all hon. Members have, but I must say that we cannot accept liability in this case. If we did, we should find ourselves in great difficulties.

Mr. Drayson: Is the Secretary of State aware that in a very similar case in my own constituency £1,000 compensation was given to the parent of the man who was killed? Will he look into this matter again on behalf of the hon. Member for Huddersfield (Mr. J. P. W. Mallalieu)?

Mr. Shinwell: This is purely a legal matter. It is not a matter in which I can intervene. What happened in this case was that proceedings were instituted against the driver concerned and the plaintiff won; the difficulty arose on the question of recovering damages.

Mr. J. Langford-Holt: Would not the right hon. Gentleman agree that his Department has a responsibility for the discipline of his men and the security of these vehicles?

Mr. Shinwell: We tried to impose discipline in this case, but the driver refused to be disciplined.

Mr. Mallalieu: Would it be possible for the Minister to make an ex gratia payment?

Mr. Shinwell: The idea had also occurred to me. I am considering that point.

War Department Quarters (Evictions)

Mr. Emrys Hughes: asked the Secretary of State for War how many applications have been made for the eviction of ex-Service men and their families from Army premises; how many have been granted; and how many cases have there been of forcible ejection.

Mr. Shinwell: Since the end of the war it has been decided in 58 cases that application should be made for a warrant for possession in enforcement of orders for possession granted against ex-Service men in occupation of War Department quarters. There have been 23 cases of


actual eviction. These figures do not include married quarters belonging to Territorial and Auxiliary Forces Associations.

Mr. Hughes: In view of the hardship inflicted on ex-soldiers with over 20 years' experience, through being evicted with their families into the rain, would the Minister definitely consider the suggestion that in case of future evictions they should be given accommodation in tents or temporary shelter?

Mr. Shinwell: In the first instance, we give very long notice even after ejectment orders have been secured in the courts and, in conjunction with the local authorities concerned, we do everything possible to find alternative accommodation, but if we fail we must have regard to the members of the Forces who require accommodation.

Lieut.-Colonel Sir Thomas Moore: In this particular case, the local authority deny any responsibility whatsoever for these people. Should not the War Office assume responsibility for the men who have served during the whole period of their adult lives? How will this help recruiting?

Mr. Shinwell: The War Office is responsible only for its employees, not for those who have been employed by it.

Accidents, Overseas (Notification)

Mr. William Shepherd: asked the Secretary of State for War what are the conditions which determine whether or not the relatives of a soldier injured overseas receive advice of an accident.

Mr. Shinwell: The next-of-kin is informed by telegram when a soldier dies, is dangerously or seriously ill, loses an eye, limb, hand or foot, or is missing. The next-of-kin is also informed of any injury resulting from an unusual incident overseas which may receive publicity in the Press. As a temporary measure, all injuries necessitating admission to hospital as a result of rebel activity in Malaya are at present notified to the next-of-kin.

Mr. Shepherd: Is it not a fact that these regulations give rise to considerable anxiety, since a man may be in hospital for months while his parents at home have no idea for what reason he is in

Hospital—until he is discharged? Ought not there to be some regulation that some idea should be given why a man is sent to hospital when involved in an accident?

Mr. Shinwell: I can imagine some anxiety by relatives in this matter, but so far as I know, the regulations work very well.

Major Legge-Bourke: Are we to understand from the main answer that in cases of unusual incidents overseas a man's relatives are informed only when the matter has been reported in the Press, or only when it is likely to be reported?

Mr. Shinwell: As I have said, the next-of-kin are informed of any injury resulting from an incident overseas likely to be mentioned in the Press—that is to say, if something is said about it. We always try to allay the anxiety of relatives by giving them any information we can.

Major Legge-Bourke: Are we to understand that that is only when the incident has been mentioned in the Press? Ought that not to be done in any case?

Mr. Shinwell: Not necessarily, but if there is an unusual incident, that is the action we take.

Camps, Cyprus

Dr. Segal: asked the Secretary of State for War what saving in Service personnel is likely to result from the projected closing down of parts of the camps at Xylotimbou and Caraolos in Cyprus.

Mr. Shinwell: The number of Service personnel required to maintain and guard the camps cannot be related in direct proportion to the number of internees remaining inside the camps. There has, however, recently been a saving in the number of troops employed on these duties.

Dr. Segal: Could not a very substantial number of troops be released if both these camps were closed down and the troops themselves relieved from duties which are as irksome as any that British troops have ever had to perform?

Mr. Shinwell: That is quite another question.

Calcutta Detention Allowance (Claim)

Mr. George Jeger: asked the Secretary of State for War, why he has now


rejected Mr. Bartlett's claim for Calcutta Detention Allowance, first submitted in January, 1946, and which has been the subject of correspondence since July, 1947.

Mr. Shinwell: This was a claim under Indian regulations. I have made full inquiries of the competent Indian pay authorities, and I am satisfied that the claim has been correctly disallowed. The original claim stated to have been submitted cannot be traced, and the officer stated to have signed the detention certificate was not the competent authority for the issue of such a certificate.

Compassionate Leave

Mr. Piratin: asked the Secretary of State for War whether he would review the policy now prevailing of refusing to grant compassionate leave to unmarried soldiers desirous of marrying the mothers of their expected babies, in order to legitimise them before birth.

Mr. Shinwell: It is not the policy to refuse to grant compassionate leave in these circumstances, and each case is considered on its individual merits.

Mr. Piratin: Is the Secretary of State aware that I am very grateful to hear that reply, and that I shall take the opportunity of sending him two cases with which I have dealt recently and which were rejected?

Non-Industrial Staffs, Malaya

Mr. Skinnard: asked the Secretary of State for War what action is being taken with respect to references in the report of the Awbery-Dalley Mission to the restrictions on Whitleyism for civilian employees of his Department in Malaya.

Mr. Shinwell: The introduction of Whitleyism for non-industrial staffs in Malaya is under consideration.

Oral Answers to Questions — TERRITORIAL ARMY

Drill Halls and Garages

Mr. A. R. W. Low: asked the Secretary of State for War to what extent priority is given by the relevant civil authorities to applications for building drill halls or garages for Territorial Army units; and what is the machinery for getting this priority.

Mr. Shinwell: There is no special machinery for dealing with applications to the local civil authorities in respect of Territorial Army buildings and the response of local authorities to these applications has varied, but my right hon. Friend the Minister of Town and Country Planning has recently asked for the cooperation of local planning authorities in securing prompt decisions on proposed sites for the headquarters and drill halls of Territorial Army units.

Mr. Low: Is this not a matter of first class national importance? Ought not the right hon. Gentleman to be more directly interested and ought he not to be pressing for machinery to ensure that the necessary drill halls are put up so that they are in time for the recruiting campaign, if it is successful?

Mr. Shinwell: All these matters are certainly of first class importance and we are imparting a sense of urgency to them.

Recruiting Meetings

Mr. Emrys Hughes: asked the Secretary of State for War how many recent recruiting meetings have been addressed by Members of Parliament; what were the approximate costs per meeting; the average attendance; and the average number of recruits obtained per meeting.

Mr. Shinwell: Territorial Army recruiting meetings are normally arranged by Territorial and Auxiliary Forces Associations and the information asked for is not available in the War Office.

Mr. Emrys Hughes: Is the Secretary of State aware that it was at his instigation that I put this Question on the Order Paper? Could he not answer it?

Mr. Shinwell: I must be acquitted of any desire to prompt the hon. Member.

Mr. Gallacher: May I ask the Minister if it is the case that the only recruit he obtained at Woking was a lad named Gallacher, and would he confirm that it was not the hon. Member for West Fife or a fellow traveller?

Mr. Shinwell: It is perfectly true that the name of the recruit was Gallacher, but I received no assistance from the hon. Member for West Fife (Mr. Gallacher).

Squadron-Leader Fleming: Could the right hon. Gentleman tell me how many recruiting meetings have been addressed by the hon. Member for Ayr——

Sir T. Moore: For South Ayrshire.

Squadron-Leader Fleming: —by the hon. Member for South Ayrshire (Mr. Emrys Hughes)?

Mr. Shinwell: None, so far as I know.

Mrs. Jean Mann: Could the Secretary of State explain why it is that in constituencies where the Member took no part at all the returns are very much higher than in constituencies like, say, Perth, where the return is the lowest of all Scotland?

Mr. Shinwell: It depends on the Member.

Mr. Emrys Hughes: Could not the Secretary of State make an effort to get this information for us?

Director-General

Colonel Dower: asked the Secretary of State for War how many officers have been appointed Director-General of the Territorial Army during the last two years and three months; and for what period has each served in this appointment.

Mr. Shinwell: Since November, 1945, three General officers have held the appointment of Director of the Territorial Army and Cadets. The first held the appointment for one year and two months, the second for one year and four months and the present Director will, on taking up another appointment in January, have served in his present appointment for eight months.

Colonel Dower: In view of the very complex and difficult problems involved in the formation of the Territorial Army, would it not be advisable to let these distinguished officers retain their office for a longer period?

Mr. Shinwell: Of course, it depends on the exigencies of the Service. If we require some high ranking officers to proceed overseas, that has to be done, and, therefore, these frequent postings occur. I am at one with the hon. and gallant

Member in seeking continuity in important posts of this kind and I hope that will be achieved.

Mr. Bellenger: May I ask my right hon. Friend if it is not now the policy of the War Office to ensure a longer term of appointment for senior officers, and does he not agree that in such an important post as this it Would be desirable to have a General officer who is likely to stay for some time so that he is able to see results?

Mr. Shinwell: Of course, that is our intention, but hon. Members must be aware that we suffered some set-back because of the illness of General Horrocks, in the first instance, and because we were unable to send Major-General Lyne abroad.

Sir Ralph Glyn: asked the Secretary of State for War if it is intended that the general officer in charge of the Territorial Army and Auxiliary Forces shall in future revert to the previous position of being a director-general with a seat on the Army Council.

Mr. Shinwell: No, Sir. The responsibilities are not the same. Executive action on the Territorial Army matters is now the responsibility of the military members of the Army Council dealing with the same subjects for the Regular Army.

Sir R. Glyn: May I ask the Secretary of State why it was considered necessary in the past to have somebody in the Army Council who was responsible for the Territorial Army? Is not the Territorial Army now sufficiently important that its position and requirements should be directly represented on the Army Council?

Mr. Shinwell: The position of the Territorial Army is, in my judgment, so important that we have fully integrated it with the Army itself and, therefore, it is the responsibility not of one man, but of the Army Council.

Earl Winterton: Did the right hon. Gentleman consult the appropriate body—I think it is called the Territorial Forces Association—which represents the views of the Territorial Associations, before he made this change?

Mr. Shinwell: No. I was not responsible for the change, which occurred before I arrived at the War Office, although, that apart, I accept responsibility for the period during which I have occupied my Office. I did not consult the Territorial Forces Association. I consulted the Army Council.

Brigadier Head: In view of the importance of the Territorial Army, as stated by the Secretary of State, is it altogether wise that this very important post has been changed three times in such a short period?

Mr. Shinwell: I have replied to that question already. Of course, it is undesirable to change the post so frequently but, as I say, it is due to the exigencies of the Service.

Sir R. Glyn: May I ask the Secretary of State for War whether there is any individual on the Army Council solely responsible for the affairs of the Territorial Army?

Mr. Shinwell: Yes. We have delegated responsibility to one member of the Army Council.

Earl Winterton: Is the right hon. Gentleman aware that when the original appointment was made his predecessor stated that it was one of the best things done, namely, that it had direct representation on the Army Council? Why change that?

Mr. Shinwell: Of course, the Territorial Army, being fully integrated with the British Army, has direct representation on the Army Council.

Oral Answers to Questions — POLISH RESETTLEMENT CORPS (COST)

Sir R. Glyn: asked the Secretary of State for War what was the total cost from first to last of administering the Polish Resettlement Corps; what were the numbers of the corps in June, 1946, 1947 and 1948, respectively; and when will the affairs of this formation be finally settled.

Mr. Shinwell: It is estimated that cash expenditure on the Polish Resettlement Corps since its inception, and including expenditure which it is expected to incur in the present and the next financial

years, will amount to a total of the order of £27,000,000. Enlistment into the corps did not start until September, 1946. The approximate strength on 1st June, 1947, was 71,000, and on 1st June, 1948, 32,000. These figures do not include the Royal Air Force section of the Polish Resettlement Corps. It is not possible to say exactly when the corps will be finally wound up, as this will depend on the rate of resettlement, but I hope it will be not later than early 1950.

Sir R. Glyn: Will the right hon. Gentleman consider issuing a statement, in the form of a White Paper or in some form, to show what is the position of the Poles, and how far the War Office are responsible for the expenditure, in view of the fact that many of them do not intend to work and are becoming an increasing burden on the taxpayers of this country?

Mr. Shinwell: We are liquidating this liability very rapidly, and, as I say, I think we shall fully liquidate it early in the year 1950.

Mr. H. Hynd: As it was stated in June last that the corps were being liquidated at the rate of between 500 and 600 weekly, can my right hon. Friend say whether the rate is being maintained? What is the strength of the corps now?

Mr. Shinwell: I have given the strength of the corps at 1st June, 1948–32,000. We are liquidating this liability very speedily. I cannot give the exact weekly rate.

Mr. Wilson Harris: Has the right hon. Gentleman power to deal effectively with men who decline to work?

Mr. Shinwell: Oh, yes, and we use our powers very effectively.

Oral Answers to Questions — TOWN AND COUNTRY PLANNING

Development Value (Claims)

Mr. Wingfield Digby: asked the Minister of Town and Country Planning whether he is aware of the slow progress that is being made in the preparation of claims for compensation for loss of development value, owing to the fact that surveyors are overworked at the present moment; and whether he will extend beyond 31st March the period during which claims will be accepted.

The Minister of Town and Country Planning (Mr. Silkin): The Central Land Board have discretion to extend the time limit for a further three months. They inform me that they will exercise their discretion in favour of any owner of land with numerous claims, if efforts have been made by such owner to submit a reasonable number of claims by 31st March, 1949. Any appreciable further extension of time must inevitably lead to a postponement of payment of claims.

Mr. Digby: Is the Minister aware that yesterday the Chairman of the Central Land Board said that he had received only 12,000 claims, about 24 per cent. of the total? Is it not then obvious that a general extension of the time is necessary?

Mr. Silkin: It is not obvious to me. There are four months still to go, and quite a lot of claims can come in during those four months.

Colonel J. R. H. Hutchison: Is the Minister aware that this is causing very considerable anxiety all through the country, and that resolutions have been passed by 12 or 18 Chambers of Commerce asking for an extension to 12 months, in order that it may be possible to get the claims properly adjusted? Will he kindly consider the matter again?

Mr. Silkin: I am not aware that there is any apprehension. As a matter of fact, the property owners have passed a resolution against extension of the time.

Agricultural Cottages (Development Charge)

Mr. Digby: asked the Minister of Town and Country Planning whether he is aware that district valuers have been asked to assess the development charge on any improvements to agricultural cottages, carried out under the Housing (Financial and Miscellaneous Provisions) Act, for record purposes only, since such cottages are exempt from development charge; and whether, having regard to the fact that this delays the carrying out of the work and to the waste of time involved, he will give instructions that development charge need not be assessed at present in cases where buildings are exempt.

Mr. Silkin: Agricultural cottages are not in law exempt from development

charge, but where a subsidy is payable under the Housing (Financial and Miscellaneous Provisions) Act, 1946, the charge is not collected while the cottage is reserved for members of the agricultural population. If the cottage ceases to be so reserved the charge becomes payable. It is for this reason, and not for record purposes, that the charge has to be assessed.

Mr. Digby: Would it not be much more sensible to save the manpower involved, by making assessments only when a charge is actually payable? In actual fact in present circumstances, in a large number of cases it may never be payable at all.

Mr. Silkin: One has to safeguard the position, which, unfortunately, is only too common, that these cottages are acquired by persons for week-end occupation.

Mr. Charles Williams: What happens when a cottage is occupied by a retired agricultural labourer?

Mr. Silkin: That is a legal question, of which I must have notice.

Small Communities (Letcombe Basset)

Sir R. Glyn: asked the Minister of Town and Country Planning to how many county planning authorities instructions have been issued that whenever possible villages and hamlets of a population less than 150 shall be forced by various means to cease as separate communities, and that steps shall be taken by other Departments to exercise discretion in the supply of services, etc., to such small centres of population; and whether it is intended to carry out this policy generally or only in Berkshire.

Mr. Hollis: asked the Minister of Town and Country Planning whether the proposal for the demolition of historic buildings in Letcombe Basset has been referred to the Advisory Committee on Historic Buildings.

Mr. Silkin: Both Questions are based on a misconception. County planning officers are in several cases making preliminary investigations in their areas; their reports are tentative and do not make positive recommendations. Before any such recommendations are made people living in the affected areas would have an opportunity of making their views known.
No instructions such as those mentioned by the hon. and gallant Member for Abingdon (Sir R. Glyn) have been issued by my Department to county planning authorities. The question of the demolition of historic buildings in Letcombe Basset does not therefore arise. I understand, however, that there is a number of houses which are subject to demolition orders made under the Housing Act before the war.

Sir R. Glyn: Is the right hon. Gentleman aware that Letcombe Basset is in my constituency and that the recommendation of the Wantage Rural District Council was turned down by the planning authority because they did not like the idea of a few houses being on the edge of the village? Is it not better to trust to the local authority, who know what is best for a village, rather than to rely on a rather distant planning officer; and is he not further aware that in spite of his answer, a definite refusal has been given by the planning authority to the putting up of eight houses on a more suitable site, more healthy and where drainage can easily be arranged?

Mr. Silkin: That goes very much wider than the original question. No decision has been arrived at. There is obviously a dispute between two local authorities, and, in due course, when the plans are submitted, it will be for the Minister to decide.

Sir R. Glyn: For the purpose of record, may I ask the right hon. Gentleman whether he will verify that statement? I think that he will find that a definite refusal has been made by the planning authority to the proposals of the rural district council.

Mr. Silkin: Of course, I will verify the statement, but it is not inconsistent with what I have said.

Mr. Godfrey Nicholson: Is not the House entitled to be told where the right hon. Gentleman and his Department stand? The general feeling is that this is a grave threat to the existence of village communities, and cannot he enlighten us as to the Government's view?

Mr. Silkin: I thought that the position was quite plain. In due course, a plan will be prepared and submitted to the Minister for approval, and it will be at that stage that representations will be

heard from all parties who are not in favour of the plan.

Mr. Nicholson: Then it will be too late.

Mr. Silkin: No.

Mr. Wilson Harris: May the House take it that whether or not the principle of this suppression of small villages has been enunciated by an officer of his Ministry, it is a principle which has not the Minister's approval?

Mr. Silkin: The House may take it that the Ministry do not approve of the suppression of these small villages because they are small villages.

Central Land Board (Compensation Fund)

Mr. Digby: asked the Minister of Town and Country Planning whether his attention has been drawn to the fact that the Central Land Board are trying to discourage sellers of land from assigning their claim to a share of the £300,000,000 compensation fund; whether he is aware of the inconvenience which will be caused to executors who have to close an estate by selling a remaining parcel of land and will be unable to do so until 1953 unless they assign the benefit of the claim; and if he will stop this practice.

Mr. Silkin: I am aware of and approve the advice given to buyers of land in the Central Land Board pamphlet, "House 1" to which the hon. Member presumably refers. A sale at building value coupled with an assignment of the seller's right to a payment from the £300,000,000 is unfair to the purchaser because he must pay a definite sum for the right to a payment of unknown amount and because he must pay for building value twice over in two immediate payments (the purchase price and the development charge). The Central Land Board have not raised any objection to assignments which are independent transactions and not connected with the sale of the land concerned. I do not therefore propose to stop this practice. In my legal experience I have been aware of many reasons why, without great inconvenience to executors, it has not been possible to close an estate for a long period. I


cannot agree that unusual inconvenience will be caused in this case.

Mr. Digby: Is the Minister aware that there is still a good deal of confusion on this point which is one of the many bad features of this Act?

Mr. Silkin: I am aware that there is some confusion, but we are doing everything that we possibly can to clear the matter up.

Gathering Grounds (Public Access)

Mr. H. D. Hughes: asked the Minister of Town and Country Planning if his attention has been drawn to the recommendation of the Gathering Grounds Sub-committee concerning public access to these grounds; whether full weight is being given to this in the policy of his Department; and what steps he is taking to secure access where it is at present prohibited.

Mr. Silkin: The answer to the first two parts of my hon. Friend's Question is, "Yes." With regard to the third part, I am in consultation with my right hon. Friend the Minister of Health and hope that as a result it will be possible to secure in due course that full advantage is taken of the recommendations of the Sub-committee.

Mr. Hughes: Is the Minister aware that over half of the major water authorities listed in the appendix to this report are at present restricting access to a degree not warranted in view of the recommendations of the report, and would he speed up the action which he is now taking?

Mr. Silkin: I am very interested in my hon. Friend's information, and I will certainly speed up a decision.

Oral Answers to Questions — NATIONAL INSURANCE

Reciprocal Schemes

Mr. Symonds: asked the Minister of National Insurance if any further arrangements have been completed in the last six months with Commonwealth and other Governments for reciprocity in National Insurance schemes; and with what countries are discussions now proceeding or contemplated.

The Minister of National Insurance (Mr. James Griffiths): As I told the House in June a reciprocal agreement has been made this year with France. Agreements have since been concluded with New Zealand on family allowances, and with Eire on sickness and maternity benefit. Discussions are proceeding with Australia about family allowances, with Australia and New Zealand about pensions, and with Canada and Eire about unemployment benefit. It is hoped to start negotiations very shortly with The Netherlands, Belgium and Luxembourg.

Mr. Symonds: In making these arrangements, will the Minister give particular attention to the carry-over of insurance rights, so that if a person leaves this country and lives in another before that country has reciprocal arrangements he will not lose his insurance rights and have to start again?

Mr. Griffiths: The whole intention is to ensure that insurance rights are carried over from our country to the country with whom we have an agreement.

Mr. Turton: Do I understand that nothing has been done to extend the pension rights to Southern Ireland?

Mr. Griffiths: A person living in this country who qualifies for a pension in this country can have that pension paid in Eire if he goes there to live.

Widows' Pensions

Mr. Lipson: asked the Minister of National Insurance (1) if he has considered the case, particulars of which have been sent to him, of a widow aged 53, whose husband, an insured person, died 21 years ago, who worked for 15 years to bring up her son and daughter and lost the former in the war and who receives only 10s. pension out of which she will have to pay 3s. 8d. weekly for 10 years to qualify for a pension of 26s. which she cannot afford to do; and whether he will make regulations to increase the pension for women widowed before 5th July, 1948, to the 26s. given to those widowed after that date;
(2) what would be the cost of increasing the 10s. weekly pension given to women widowed before 5th July, 1948, to the 26s. granted to those widowed after that date.

Mr. J. Griffiths: It is not the case that all women widowed under the new scheme will qualify for a pension of 26s. Some will not qualify for a continuing widow's pension at all. The immediate cost of increasing to 26s. a week all pensions awarded to widows of men whose insurance was under the old scheme would be thirteen million pounds a year. This is additional to the cost already incurred in giving the appropriate widow's benefit of the new scheme to 160,000 existing widow pensioners who still have young children or are incapacitated. I cannot see my way to extend the provision already being made. As regards the case cited, the hon. Member has already given me particulars and I have arranged for an officer of the Department to see the widow and explain the position. I should be happy to discuss the whole matter with the hon. Member.

Mr. Lipson: Will my right hon. Friend tell the House why, in view of the fact that Parliament has decided that 26s. is a reasonable pension for one widow after 5th July, in certain circumstances, when the conditions are the same, he considers that 10s. is an adequate pension for a widow before 5th July, in view of the fact that she is probably older and less able to work?

Mr. Griffiths: The whole problem is to what extent we can make the provisions of the new scheme retrospective to those who qualify under the old scheme. I cannot go further than I have done without an increase in the contribution, which I do not want to make just now. May I point out to the hon. Member and to the House that cases of this kind can be covered, if they are outside the insurance scheme, by the National Assistance Act.

Miss Bacon: Can my right hon. Friend say whether the £13 million quoted refers to all widows or merely to those over 50, and can he give the figure which would have to be spent to increase the pension of those over 50 from 10s. to 26s.?

Mr. Griffiths: I will give the figure, if my hon. Friend will put down a Question.

Squadron-Leader Fleming: The Minister said that widows outside the orbit of this Act can go to the Assistance Board. Is he aware of the fact that most people do not want to go to the Assistance Board?

Mr. Griffiths: This House has provided for persons under the Assistance Board shorn of all the indignities of Poor Law, and may I express the hope that Members of this House, since we have adopted this new scheme, will encourage those outside the scheme to make application to the Assistance Board.

Mr. Lipson: Will my right hon. Friend give further consideration to the matter, as these grievances are a blot on the great National Insurance Scheme.

Mr. Griffiths: I appreciate that hon. Members are worried but I have to remind the House that I should have to increase the contribution, and I do not want to do that until the scheme is well launched.

Mrs. Mann: In the case cited, would not the widow do much better to apply for a pension in respect of the death of her son on war service?

Mr. Griffiths: As I have said in my original answer, an officer of my Department is seeing the person in question, and I propose to discuss the matter with the hon. Member.

Students

Mrs. Leah Manning: asked the Minister of National Insurance whether he will grant credits in lieu of insurance payments to all full-time students, irrespective of age, in view of the great financial hardship which a contribution of 4s. 8d. a week for a man makes.

Mr. J. Griffiths: As I explained in the Debate on the National Insurance (Contributions) Regulations, 1948, on 14th July last, the utmost concession which I have found it possible to make to students over the age of 18 is to relieve them from the obligation to pay contributions in respect of periods of full-time education. I do not feel able, in fairness to the general body of contributors, to make provision also for the grant of credits in these cases. I am, however, proposing to submit to the National Insurance Advisory Committee in the near future a draft regulation which will give former students an opportunity of making retrospective payments of contributions covering the period of their course.

Personal Case

Sir Waldron Smithers: asked the Minister of National Insurance why there


has been a delay of several months in dealing with the claim for the increased pension of 16s. made in respect of the wife of Mr. H. Field, 12, Beechwood Avenue, Farnborough, Kent; and whether he will take immediate steps to decide this claim.

Mr. J. Griffiths: The hon. Member will be glad to know that an increase of 16s. a week in the rate of Mr. Field's retirement pension has been awarded to him in respect of his wife. An order book, together with a postal draft in payment of the arrears due, was issued to him on 11th November.

Sir W. Smithers: Can the Minister explain why this correspondence with Mr. Field has been going round and round in a vicious circle for over five months, from Blackpool to Bromley; and is he aware that in 1944 I warned him that the administration of this scheme would break down, as it has?

Mr. Griffiths: I am very glad to say, having regard to the magnitude of the scheme, that it is going reasonably well. I am sorry there was a delay in this case, but it was one of those cases which happened during the transition period. As from 5th July all these cases have been dealt with through our local offices, and we are doing our very best to make the scheme work.

Mr. Speaker: Mr. Janner.

Sir W. Smithers: On a point of Order. May I ask the Minister if he will take disciplinary action against——

Mr. Speaker: We have got only as far as Question No. 32 in 41 minutes, and we really must be quicker.

Company Directors (Classification)

Mr. Janner: asked the Minister of National Insurance what steps he is taking to give a clear explanation to companies with regard to the stamping of their directors' insurance cards, in view of the fact that some directors are classified as employed persons and others as self-employed persons.

Mr. J. Griffiths: The question whether, in any particular case, a director of a company is an employed or self-employed

person for the purposes of the National Insurance Act can be determined only by reference to the conditions under which he works for the company. An explanatory leaflet (N.I.35) dealing with the position of directors is available at the local offices of the Ministry, and in cases of doubt the Ministry is always prepared to advise if full information is furnished.

Mr. Janner: Is my right hon. Friend aware that in Leicester and other places considerable confusion has arisen owing to the inability of people fully to understand that leaflet; and will he take some step to issue a much clearer statement so that people will know what their position is?

Mr. Griffiths: We have sought to make what is a very difficult matter—whether a person is or is not under a contract of service, which is a legal term—as plain as laymen can do.

Children's Allowances

Mr. Low: asked the Minister of National Insurance how he proposes to alleviate the great hardship caused to children of divorced parents under the present law, whereby if their father died before 5th July, 1948, without re-marrying the children are debarred from receiving a children's allowance, although they would have been entitled to such an allowance if he had re-married.

The Parliamentary Secretary to the Ministry of National Insurance (Mr. Steele): I presume the reference is not to the family allowance which would normally be payable where there was more than one child, but to the provision made for the first or only child in conjunction with a widow's pension under the old scheme or as part of a widowed mother's allowance under the new. In the class of case mentioned there is no widow and neither scheme gives me power to pay an allowance for the first child so long as the mother herself is not entitled to benefit.

Mr. Low: If the law is as stated in the Question, which is in accordance with a letter received from the Parliamentary Secretary's Department, is the law not very odd, and should not the hon. Gentleman or his right hon. Friend do something to alleviate the hardship caused by this extraordinary anomaly?

Mr. Steele: Well, I appreciate that a lot of odd things happened under the old scheme. So far as the present position is concerned, it is a widowhood benefit, and where there is no widow, there can be no widowhood benefit.

Insurance Stamps

Major Ramsay: asked the Minister of National Insurance whether he is aware of the bad finish of National Insurance stamps, which do not take ink writing and of which the surface and price can be wiped off with a damp cloth; and whether he will take steps to improve their condition in future.

Mr. Steele: A new process has been adopted in the manufacture of these stamps, and under the test of experience certain difficulties of the kind mentioned have been encountered. Modifications in the method of production have been introduced which will, I hope, remove the grounds for complaint.

Variety Artists

The following Question stood upon the Order Paper in the name of Mr. WYATT:

35. To ask the Minister of National Insurance if he has yet decided whether artists engaged are employed or self-employed persons for the purpose of National Insurance contributions.

Mr. Wyatt: In putting this Question may I point out that the words "by the B.B.C." should come after the word "engaged"?

Mr. Steele: I presume the reference is to variety artists. Whether they are employed or self-employed persons depends on the terms of the engagement in the particular case. In illustration of this I may mention that artists who perform independent turns under weekly or seasonal contracts would, generally speaking, be self-employed persons. A number of points have been raised with my Department by representatives of the profession and are under consideration with a view to clarification of the position. I hope that it will be possible to issue a leaflet in the near future giving guidance on the subject in some detail.

Mr. Wyatt: Is my hon. Friend aware, with particular reference to the B.B.C. that the delay in arriving at a decision is

causing considerable inconvenience to the artists concerned, who do not know whether they or their employers are liable for payment.

Mr. Steele: That particular point is under consideration by my Department, and I will see what I can do to speed up the thing.

Contributors (Salary Limit)

Mr. Skinnard: asked the Minister of National Insurance whether persons who, by reason of increase of salary to over £420 a year within two years prior to 5th July, 1948, ceased to be compulsorily insured, and who did not then become voluntary contributors, are now ineligible for sickness and unemployment benefit; and whether they will receive reduced pension at retiring age.

Mr. Steele: As the answer is necessarily rather long and contains a number of dates I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Mr. Skinnard: Could the Parliamentary Secretary help the House by saying briefly whether getting benefit entails the payment of arrears.

Mr. Steele: The fact is, I cannot say briefly because this is a very technical subject, and I want to see that the proper information is given.

Following is the answer:

Title to unemployment benefit cannot be affected by the non-payment of contributions under the old Health and Pensions Insurance Scheme. But nonpayment of such contributions in the circumstances stated might make the insured person ineligible for sickness benefit during 1948, and also during the succeeding benefit period beginning in January, 1949. The rate of any retirement or widow's pension ultimately payable on the insurance of such a person might also be adversely affected by the non-payment of contributions during the year ending July, 1948. Whether this is so or not will depend on a number of individual factors, including the credit of contributions given for insurance prior to July, 1947, and the contributor's record under the present scheme. Contributors with less than 50 contributions paid or credited for the year ending July, 1948, are now receiving notices giving them an


opportunity of making good the deficiency in order to safeguard their benefit and pension rights under the new scheme.

Oral Answers to Questions — NATIONAL SERVICE

Statistics

Mr. Symonds: asked the Minister of Labour if he will give the number of men who have become liable for National Service in each year since the end of the recent war; how many of them have not so far been called up for service; how many of these were excused on medical or conscientious grounds; how many were granted deferments to complete apprenticeships or educational courses or for other purposes; how many of those granted deferment have still not been called up at the expiry of their deferment period, and for what reasons.

The Minister of Labour (Mr. Isaacs): As the reply is long and includes a number of figures I will, if I may, circulate it in the OFFICIAL REPORT.

Mr. Symonds: Could my right hon. Friend say now whether the figure asked for at the end of the Question is a large one or a small one?—because there is a suspicion in certain quarters that some people have been able to use deferments in such a way as to avoid military service altogether.

Mr. Isaacs: I could not say whether it was large or small without relating it to the whole set of figures. However, I think I have given all the information for which my hon. Friend has asked.

Mr. Kenneth Lindsay: Could the right hon. Gentleman say whether he is satisfied that the present method of call-up is not interfering with industry and education?

Mr. Isaacs: I should much rather see that Question on the Order Paper.

Following is the reply:

Men born between 1st January, 1928, and 30th September, 1930, became liable to register under the National Service Acts at various dates between 1st December, 1945, and 4th September, 1948. The estimated total numbers in

these age-classes in Great Britain were as follow:—


Men born in 1928
334,000


Men born in 1929
327,000


Men born in January-September, 1930
256,000

Statistics of the numbers in the 1928 class who have not yet been called up are not available. As regards the 1929 and 1930 classes, the latest count was made on 3rd September, 1948, and the figures relate to the 1929 class and the first half of the 1930 class (they do not include the third quarter of the 1930 class who registered on 4th September). The principal groups of men who had not been called up at that date were as follow:



1929 Class
1st Half 1930 Class


Number found unfit for service in the Forces
28,700
12,600


Apprentices
41,400
25,800


Agricultural workers
18,400
8,400


Coal Mining Workers
8,400
2,800


Seamen
5,300
1,200


Railway footplate staff
—
1,000


University students, etc.
7,000
4,000


Boys at school granted deferment to 31st July, 1949 (to take Higher School Certificate, etc.)
100
800


Conscientious Objectors
400
200


Others not called up (including among others, men whose applications for deferment were under consideration and men granted postponement of calling up on grounds of personal hardship, but excluding men immediately available for posting to the Forces)
2,000
6,300

These figures represent the numbers in the various categories whose call-up was still deferred or suspended at 3rd September. It is not possible to say how many separate individuals have, during any stated period, had their call-up deferred in order to complete their apprenticeships or take examinations, etc., nor are statistics available showing the numbers still not called up after the termination of their deferments, but the latter figure must be small.

Deferment

Mr. Sidney Shephard: asked the Minister of Labour in what cases deferment or exemption is given from military service.

Mr. Isaacs: I have no power to exempt anyone from his liability under the


National Service Acts. Deferment on industrial grounds is now confined to men engaged in coalmining or agriculture. These are not called up so long as they remain satisfactorily employed in those industries. Deferment is also granted to apprentices, learners and pupils for the professions, and to certain students in full-time attendance at approved courses. The call-up of men in the Merchant Navy, of railway foot-plate staff, and of key workers in the cotton industry is temporarily suspended.

Mr. Shephard: But is the right hon. Gentleman not aware that there is a very strong feeling in this country that, except on physical grounds, there should be no permanent deferment for any person; and can he say whether those who have been deferred during the last three or four years and have finished their apprenticeship have since been called up?

Mr. Isaacs: I could not answer the latter question without notice. I think probably the answer will be found in the answer I have given to a previous Question. We have no information on the suggestion that we should now abandon the temporary deferment of agricultural and mining workers.

Apprentices (Territorial Training)

Mr. S. Shephard: asked the Minister of Labour if it is intended that apprentices who have received deferment for military service will be called upon to undertake Territorial training.

Mr. Isaacs: No, Sir, it is not intended to call upon apprentices to undertake Territorial training during their deferment.

Mr. Shephard: But is it right that these men should evade all forms of military service; and is it right that those who have been called up will have to do six years Territorial training, while their companions get off scot-free?

Mr. Isaacs: I am not quite sure whether I have misunderstood the real purpose of the hon. Gentleman's Question, or whether he has misunderstood my answer. The point is that when an apprentice or a student asks for

deferment of service until after their training we do not call upon them to do Territorial training during their period of deferment.

Mr. W. Shepherd: Is it not a fact that men in agriculture and in mining are not called up; and what reason is there for not calling them up for some form of Territorial service, in order to give them equality with the rest of the community?

Mr. Isaacs: I am dealing with the Question on the Order Paper, which asks about the power and authority I have at the present time. I am happy to say that many miners and agricultural workers voluntarily do Territorial service, although they are deferred.

Oral Answers to Questions — MUNICIPAL EMPLOYEES (WOLVERHAMPTON)

The following Question stood upon the Order Paper in the name of Mr. BOYD-CARPENTER:

41. To ask the Minister of Labour whether, in view of the fact that employees cannot be dismissed without his sanction, he was consulted by the Wolverhampton Council before their introduction of a closed shop for their employees.

Mr. H. D. Hughes: On a point of Order. Would you inform me, Mr. Speaker, what redress is open to an hon. Member when another hon. Member puts down a Question—an ill-informed Question—interfering with the first hon. Member's constituency without giving him any notice, and then fails to turn up to call that Question?

Mr. Speaker: I think that is a little unfair on the hon. Member who put down the Question. I understand he is burying his mother; naturally he is not here.

Oral Answers to Questions — NATIONAL FINANCE

Factory Extensions (Land)

Mr. Hurd: asked the Chancellor of the Exchequer if he is aware that the uncertainty about possible development charges under the Town and Country Planning Act is holding up necessary factory extensions on land held for this purpose; and if he will hasten a decision.

The Chancellor of the Exchequer (Sir Stafford Cripps): I hope to be able to make an announcement on this point very shortly.

Pound Sterling (Purchasing Power)

Sir W. Smithers: asked the Chancellor of the Exchequer the purchasing power of the £1 in April, 1948, as compared with October, 1938, to include the whole field of personal expenditure and reckoning the value of the cost of living subsidies at 13s. a week per family, respectively.

Sir S. Cripps: Fifty-seven per cent. reckoned over the whole field of personal expenditure. The proviso about subsidies in the Question cannot be brought into the calculation; but it is, of course, the case that in the absence of the subsidies, the purchasing power of the pound would be less.

Sir W. Smithers: Will the Chancellor of the Exchequer point out, in the bulletins and other papers he issues which boast about the work of the Socialists, that the purchasing power of the pound is still going down?

Sir S. Cripps: I am afraid that I do not issue any such papers.

Sir W. Smithers: You do.

British Personnel, Pakistan (Income Tax)

Sir Wavell Wakefield: asked the Chancellor of the Exchequer by what authority British personnel seconded to Pakistan and paid by Pakistan are subject to British Income Tax, although nonresident in Britain and subject to various forms of indirect taxation in Pakistan.

Sir S. Cripps: British personnel seconded to Pakistan are, in general, paid from British Service Votes and are liable to United Kingdom tax on their pay, like other members of the Forces serving abroad, under Rules 6 and 18 of Schedule E of the Income Tax Act, 1918. In some special cases the individuals are paid by Pakistan and are not liable to United Kingdom tax so long as they are not resident in the United Kingdom.

Sir W. Wakefield: In view of the fact that certain retired Indian personnel on the British special list are subjected to

Indian and Pakistan rates of tax, and as their sources of income are exactly the same as the category of personnel described in my Question, why should not this category also be subject to Pakistan or Indian Income Tax and not to British Income Tax?

Sir S. Cripps: Perhaps the hon. Member will put down that Question.

Mr. Low: Is it not the case that these men are also liable to Pakistan Income Tax? Is there not an appropriate double Income Tax arrangement for them?

Sir S. Cripps: There are negotiations proceeding with regard to double Income Tax.

European Recovery Programme

Sir W. Smithers: asked the Chancellor of the Exchequer if he will give in pounds and in dollars the amounts of Marshall Aid expected up till 1952, and the dates and amounts of the monthly and annual instalments expected, and of instalments already completed.

Sir S. Cripps: E.R.P. assistance is voted by Congress on an annual basis, and I can form no estimate of what, if any, assistance will be provided after June, 1949. For the current period Congress has voted 5 billion dollars (approximately £1,250 million), of which 1,235 million dollars (approximately £309 million) has been allocated to the U.K. for the nine months from April to December.

Sir W. Smithers: Is the Chancellor of the Exchequer aware that if I were in America, I would say to him: "Not another dollar until you withdraw the Iron and Steel Bill"?

Entertainment Duty (Football Clubs)

Mrs. Jean Mann: asked the Chancellor of the Exchequer if he is aware that the 1946 Budget concessions to football clubs have in no way benefited spectators in Scotland, as was hoped for at that time, and that further concessions in the Budget this year have again failed to achieve this object; and failing readjustment of entrance money, if he will consider withdrawing these concessions.

Sir S. Cripps: I am aware that the Scottish clubs have so far refused to


reduce their admission prices. I am proposing to take this matter up again with the Scottish clubs.

Mrs. Mann: Is my right hon. and learned Friend aware that the Federation of Scottish Senior Football Supporters will be delighted if he succeeds in detaching the canny fingers of the Scottish League from this Entertainment Duty?

Mr. Gallacher: Is the Chancellor of the Exchequer aware that, since his statement, the concession of cheap rates of entry to old age pensioners into many football clubs has been stopped by the League? Will he also take this up?

Post-War Credits

Mr. Chetwynd: asked the Chancellor of the Exchequer the amount of Post-War Credits due for repayment year by year; and the amount repaid to date.

Sir S. Cripps: The total amount of Post-War Credit originally created is estimated at £800 million, of which £125 million has been repaid under the provisions of the Finance Acts of 1946 and 1947. Of the balance of £675 million, about £120 million relates to the year 1941–42, £150 million to 1942–43, £30 million to 1943–44, £185 million to 1944–45 and £190 million to 1945–46. On the existing basis of repayment (i.e., to men over 65 and women over 60) about £18 million will be repaid each year to persons attaining the qualifying age.

Mr. Chetwynd: Will my right hon. and learned Friend consider handing over some of this money to the Assistance Board who can then meet claims of hardship, being repaid later in Post-War Credits?

Sir S. Cripps: No, Sir.

Mr. W. Fletcher: Will the Chancellor consider before his next Budget some machinery whereby in cases of real hardship old people can get the money which is undoubtedly theirs? Is he further aware that there is a strong feeling throughout the country on this point?

Sir S. Cripps: Old people are at present entitled to get their money.

Mr. Nicholson: Does the Chancellor of the Exchequer shut his mind completely

against any concessions in favour of particularly pathetic and hard cases? Will he not give the matter consideration?

Sir S. Cripps: I am always prepared to consider any matters put forward.

Purchase Tax (Hairdressers)

Professor Savory: asked the Chancellor of the Exchequer whether he will remove the Purchase Tax imposed on the tools and specialised equipment of essential use by Northern Ireland hairdressers for the sole purpose of earning their living, and thus treat the hairdressers with the fairness shown to other workers who have long been able to purchase free of Purchase Tax such tools and equipment used specifically for earning their living.

Sir S. Cripps: No, Sir.

Professor Savory: Is not the right hon. and learned Gentleman aware that these assistants have to pay Purchase Tax of 33⅓ per cent. on the razors and scissors they have to buy in order to carry on their calling?

Sir S. Cripps: Yes, Sir, but it is quite impossible to distinguish razors that are used by assistants in Northern Ireland from those used by other people.

Mr. C. Williams: Would it not be better if the Chancellor did this for England first?

Re-armament (Consumer Goods)

Mr. Emrys Hughes: asked the Chancellor of the Exchequer to what extent the re-armament programme is likely to affect the supply of goods for consumption in the coming year.

Sir S. Cripps: The measures so far taken are unlikely to affect significantly the supply of goods for consumption in the coming year.

Mr. Hughes: Does the Chancellor of the Exchequer think that we can have more guns and more butter at the same time?

Sir S. Cripps: Yes, Sir, if our production is increased.

Chartered Shipping (Foreign Currency)

Mr. Douglas Marshall: asked the Chancellor of the Exchequer what is the amount of foreign currency which he has so far permitted British Railways to expend on the chartering of vessels from foreign countries.

Sir S. Cripps: It would not be in the public interest to disclose the amount of foreign exchange allowed to individual persons or undertakings, and I regret therefore that I cannot furnish this information.

British Cars (American Purchases)

Mr. Donner: asked the Chancellor of the Exchequer whether he is aware that under his regulations an American citizen is unable to buy a British car for dollars in London, or to take delivery in this country; and whether he will amend these regulations.

Sir S. Cripps: No, Sir. Any American citizen can buy a British car for delivery in the U.K. against payment in dollars, provided that if the car is from the export quota he intends to export it within a maximum period of one year from the date of purchase.

Tourist Currency Allowance (France)

Mr. Keeling: asked the Chancellor of the Exchequer if he will increase the allowance of currency to tourists in France in view of the favourable balance of trade with that country.

Sir S. Cripps: No, Sir, I regret that this is not possible.

Mr. Keeling: Is that reply due to the "least-favoured nations clause" in the Agreement with Switzerland, which bars any increase in the £35 so long as it is not granted to Switzerland? If so, will the Chancellor bear in mind, when any revision of the Swiss Agreement is possible, the great advantages of closer contact with the French, which an increase in the allowance would make possible?

Sir S. Cripps: I am quite conscious of the advantages and will bear that in mind.

Viscount Hinchingbrooke: Would it not have been more in conformity with

the purposes behind Marshall Aid if the Government, instead of negotiating with the French Government on the basis of a Treasury-to-Treasury Loan, had accepted French exports and allowed the people to travel more?

Sir S. Cripps: We accepted all the French exports they can supply.

Hon. Members: No.

Mr. Nicholson: Would not one of the advantages of the suggestion put forward in the Question be that there will be an anti-inflationary result due to the mopping-up of purchasing power in this country?

Sir S. Cripps: As has already been pointed out, there is an arrangement with the Swiss which does not permit this.

Government Information Services (Inquiry)

Mr. Wyatt: asked the Chancellor of the Exchequer whether he will give the names of those appointed to serve on the committee set up to inquire into the Government's Home Information Services; and whether he will extend the scope of this committee so that it may inquire into the Government's overseas information services also.

Sir S. Cripps: Yes, Sir. I will circulate the names of the members of the Committee in the OFFICIAL REPORT. As regards the second part of the Question, the method by which expenditure on the Government's overseas information services might appropriately be reviewed is under consideration.

Mr. Wyatt: Is not my right hon and learned Friend aware that the overseas information services require every bit as much investigation as the Home services, and that it would be as well to allow one committee to examine both subjects at the same time, as they overlap and run parallel?

Sir S. Cripps: I think the circumstances are often very different.

Following are the names:
Sir Henry French (Chairman): Director General, British Film Producers' Association.
Mr. A. P. Ryan: The Times.
Mr. J. I. C. Crombie: Treasury.
Mr. E. M. Nicholson: Lord President's Office.
Mr. S. A. Bailey: Ministry of Transport.
Mr. J. Littlewood (Secretary): Treasury.

Anglo-Italian Financial Agreement

Colonel Crosthwaite-Eyre: asked the Chancellor of the Exchequer whether he is aware that the Italian Government is not observing the provisions of the Anglo-Italian Financial Agreement regarding parity of sterling; and what action has been taken by His Majesty's Government to ensure that these provisions are now fulfilled.

Sir S. Cripps: Yes, Sir. A U.K. Financial Delegation has just arrived in Rome and the hon. and gallant Member can rest assured that this matter will be dealt with.

British Properties, Burma

Colonel Crosthwaite-Eyre: asked the Chancellor of the Exchequer the value of British properties already taken over by the Burmese Government for which terms of compensation have not yet been settled.

Sir S. Cripps: No, Sir. As I explained to the hon. and gallant Member last week, the British interests concerned are negotiating with the Government of Burma. While we cannot usefully comment on or take part in such detailed discussions, we have continually pressed the Burmese Government to carry out the undertaking given at the conclusion of the Treaty of 17th October, 1947, to pay equitable compensation. We shall continue to do so.

Colonel Crosthwaite-Eyre: When the Chancellor of the Exchequer says that he cannot usefully interfere, does he really think it right that British property should be expropriated in Burma with no compensation settled, while the Government do not take such steps as lie in their power, to protect British interests concerned but merely sit on the fence?

Sir S. Cripps: As I have pointed out, we have taken every step to get the Burmese to carry out the undertaking given to pay equitable compensation.

Earl Winterton: Is the Chancellor of the Exchequer aware that the Leader of the Opposition and I warned the Government this would happen when the Burmese Measure was before the House, and that we were told at the time the Government had every expectation that payments would be made at an early date? In these circumstances, why have not their anticipations been fulfilled?

Sir S. Cripps: Because negotiations are still proceeding.

Colonel Crosthwaite-Eyre: The Chancellor of the Exchequer has said that the Government have taken every step. Will he tell the House what actual steps have been taken?

Sir S. Cripps: Steps of representation through the proper channels.

Mr. W. Fletcher: When the Chancellor says that he cannot usefully interfere, does that mean he is going on with the £80 million free loan the Treasury are giving to Burma and the £15 million gift; or are they going to be "usefully interfered" with?

Sir S. Cripps: There is no intention of interfering with any undertaking we have given.

Mr. Oliver Stanley: If undertakings we have given are to be carried out, are we not entitled to insist that undertakings given us in return shall also be carried out? Can the Chancellor say how long these negotiations to which he has just referred have been proceeding?

Sir S. Cripps: I could not give the exact date when the negotiations started, but we are, as I have stated three times, insisting that their undertakings shall be carried out.

Colonel Crosthwaite-Eyre: In view of the most unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

BIRTH OF A PRINCE (ADDRESS OF CONGRATULATION)

The Prime Minister (Mr. Attlee): I beg to move,
That an humble Address be presented to His Majesty to congratulate His Majesty, Her Majesty the Queen and Their Royal Highnesses the Princess Elizabeth and the Duke of Edinburgh on the birth of a son to Her Royal Highness the Princess Elizabeth, Duchess of Edinburgh.
When it was my privilege last April to move an Address of congratulation to Their Majesties the King and Queen upon their Silver Wedding, I remarked that this was essentially a family festival, and the occasion of the Address I have the honour to move today is also a family occasion. The birth of a son is a very special event in the life of a family. It is an event which brings deep pleasure to the parents and grandparents, but it is also an occasion when all those who hold the family in esteem and affection may cordially rejoice with them and share whole-heartedly in their happiness.
Today, our Royal Family holds the affection and regard of the peoples of the Commonwealth and Empire in a measure which has not been surpassed by even the best loved of their predecessors. I know that in millions of homes in this country and throughout the Commonwealth and Empire the news of the birth of a son to Her Royal Highness Princess Elizabeth brought real gladness. I am sure that this House, representing the people, will wish to join in offering our most sincere congratulations to Their Majesties and to Their Royal Highnesses the Princess Elizabeth and the Duke of Edinburgh.
A year ago the marriage of the Princess Elizabeth and the Duke of Edinburgh was the subject of great satisfaction and pleasure. Now, again, there is rejoicing that this felicitous union has been blessed with a son who, in course of time, may carry on the great tradition. We are glad, too, because we have the promise of continuity in that happy family life of which Their Majesties the King and Queen have shown so fine an example. The Royal Family, by their example in private life as well as in their devotion to public duty, have given strength and comfort to many in these times of stress and uncertainty.
The young Prince who was born last Sunday may have to carry great responsibilities. But he is the heir to a great

tradition. We shall watch him growing to manhood with lively interest, knowing that in his own home he will receive a training, by example rather than mere precept, in that courtesy and in that gracious and tireless devotion to the manifold duties of constitutional monarchy which have won the hearts of our people.
It seems to me appropriate that this Address should be presented to His Majesty by Privy Councillors representing all parties.

Mr. Churchill: It is refreshing to have our party quarrels broken into by so agreeable an interlude, and I am very proud that it falls to my lot, on behalf of the Conservative Party, His Majesty's official Opposition, to express wholehearted support of the Motion which the Prime Minister has moved. I congratulate him upon the appropriate terms and the well-chosen language in which he has commended this Address to us. I am glad that he has invited Privy Councillors on this side and in the Liberal Party, too, to accompany the representatives of the Government to carry this Address, should it be voted by the House, to Buckingham Palace. We shall accept the invitation with pleasure.
The thoughts that are in the minds of the millions to whom the Prime Minister referred are those connected with home and family, which appeal to everyone and especially, if I may say so, to us in this island of ours, so long shielded from foreign invasion and oppression. There is no doubt that it is around the family and in the home that all the greatest virtues, the most dominating virtues of human society, are created, strengthened and maintained. These are feelings which stir the hearts of all parties and classes throughout the land, and give a joy to masses of people which arises only from the finest and most elevating instincts they possess.
Our ancient Monarchy renders inestimable services to our country and to all the British Empire and Commonwealth of Nations. Above the ebb and flow of party strife, the rise and fall of Ministries and individuals, the changes of public opinion or public fortune, the British Monarchy presides, ancient, calm and supreme within its functions, over all the treasures that have been saved


from the past and all the glories we write in the annals of our country. Our thoughts go out to the mother and father and, in a special way today, to the little Prince, now born into this world of strife and storm. I have no doubt he will be brought up, as the Prime Minister has mentioned, in all those traditions of constitutional government which make the British Monarchy at once the most ancient and most secure in the world. I hope that among these principles that will be instilled into him will be the truth that the Sovereign is never so great as when the people are free. There, we meet on common ground, and I have the greatest pleasure in supporting the Motion which the right hon. Gentleman has just presented to the House.

Mr. Clement Davies: Mr. Speaker, I thank you for the opportunity you have given me of supporting the Motion moved by the Prime Minister and seconded by my right hon. Friend in such moving and apt terms. On behalf of my colleagues and on behalf of all whom we represent I wish to tender our sincere and affectionate congratulations to Their Majesties, to the royal parents and to their son. This is one of the great occasions when we appreciate and realise to the full the close relationship that exists between the Royal Family and the people, not only here in this country but throughout the Commonwealth and Empire, and we all rejoice and share in their happiness.

Mr. Butcher: This is such an occasion that my hon. Friends who sit with me have asked me to say how heartily we join in the Motion proposed by the right hon. Gentleman the Prime Minister and desire that our, congratulations and

humble duty be conveyed to Their Majesties.

Mr. Gallacher: Although I am not one of those invited to carry the Address to Buckingham Palace, I feel like making a few observations on this occasion. In doing so, I wish to make no adverse comment on the celebrations associated with the birth of this baby boy, because when I was born there was pealing of bells and joyful singing in abundance. I was born on a Christmas Sunday morning. I feel it is necessary, though somewhat unfortunate, that I should have to draw the attention of the Prime Minister to the fact that, despite the pledge to make housing a military operation, there are far too many babies in this country being born in sub-lets and in appalling slum conditions. I would ask the Government and the Opposition, even as they present this Motion to the House, to reshape policy and to redirect this military operation so that the great problem of housing may be solved and every babe born in the country may get home surroundings conducive to health and happiness. I say to the Prime Minister and the Leader of the Opposition that to those who are in greatest need, there should go from this House the greatest measure of service.

Question put, and agreed to, nemine contradicente.

Resolved:
That an humble Address be presented to His Majesty to congratulate His Majesty, Her Majesty the Queen and Their Royal Highnesses the Princess Elizabeth and the Duke of Edinburgh on the birth of a son to Her Royal Highness the Princess Elizabeth, Duchess of Edinburgh.

Address to be presented by Privy Councillors or Members of His Majesty's Household.

Orders of the Day — IRON AND STEEL BILL

Order read for resuming Adjourned Debate on Amendment to Question [15th November], "That the Bill be now read a Second time," which Amendment was to leave out "now," and at the end of the Question to add, "upon this day six months."—[Mr. Lyttelton.]

Question again proposed, "That 'now' stand part of the Question."

3.44 p.m.

Mr. Churchill: When a Measure of first rate importance is presented to the House of Commons it is always necessary for us to ask the question: Is it going to help the country or is it a partisan manoeuvre? Is it progress that is sought or is it faction? This is certainly the time to apply that test, because on the morrow of our greatest victory we are living on subsidies by loan or gift provided by taxes on the hardworking and heavily-burdened people of the United States. I have always thought that we should need their help after the war, but it should be a point of honour with us, irrespective of party nostrums, to regain our full economic independence at the earliest moment, and to do nothing that would put off that event either by hampering our output or wantonly dividing our people. Does this Bill nationalising the steel industry help us in the right direction or not? That is the question before us this afternoon.
I am quite ready myself to look back into the past. I was a member of Mr. Lloyd George's Coalition Government after the first world war. I saw at first hand the tremendous effort which he made to avert unemployment. I was very glad that my old Unemployment Insurance plan of 1909 and the labour exchanges which were part of it should become the method and structure upon which a provision from the worst evils of want could be made for the large numbers of unemployed who were thrown upon us. In the first four years from 1919 to 1922 unemployment probably averaged between one million and 1½ million, and the Unemployment Insurance policy without contributions became no more than a dole morally and actually. The dole cost nearly £200 million in those four years alone. Hon.

Members opposite need not "ask your dad" about these things while they have the advantage of asking your grandad.
Certainly, I can assure the House, every endeavour was made to solve the problems of those hard days. Here let me say that Mr. Lloyd George's Cabinet stood in about the same relation in brain power and good will compared to the present Administration as does Mr. Lloyd George himself in history stand to the latest Welsh product. The present Socialist Government boasts its superior record of achievement compared with 1919 and 1922. There has been full employment since the war stopped, whereas in the similar period after the first world war unemployment was our greatest distress and anxiety. Of course, as time passes and experience is gained more knowledge becomes available. The White Paper of the National Government of 1944 shows that the lessons and experiences have been appreciated, but there is a very simple explanation of the improvement which is pointed to so often between the four years after the first great war and the four years after the second.
After the first world war the United States was isolationist. They called for strict accountancy of money that had been loaned and they asked for the repayment of financial debts at the earliest possible moment, both in reparations from the defeated and in repayments from their Allies. We were left to face our problems by ourselves. Now in our present troubles we have no longer, thank God, to face an isolationist United States. They have come to our aid. They gave us a loan which I welcomed, and helped forward to the best of my ability, a loan of £1,000 million. Now, under the Marshall Plan, which had its origin traceably in the movement for a united Europe, they are giving us £300 million a year now and for several years to come. That is what has made the difference in the figures of unemployment. We have not had to do it all ourselves as we did last time. We have had the help of a generous comrade and trusty friend.
The Lord President of the Council was quite right when he said, in April last in Manchester—I am quoting him exactly:
We should be facing big cuts in rations and a million or two people on the dole if our


generous and far-sighted friends and allies in America had not come to the rescue.
The Minister of Health himself—I do not see him in his place today, although I think he is the driving power behind this Bill—endorsed the statements of the Lord President of the Council, when he said at Scarborough a month afterwards:
Without Marshall Aid, unemployment in this country would at once rise by 1,500,000.
Here are plain and candid admissions by leading Ministers in the Government that, but for American Aid there would be as much as, or even more unemployment now, in these days under the Socialist Government, than there was in the similar period after the first world war. I do not think that that fact ought to be overlooked in current party controversy.
It does not therefore seem that the question of American Aid should be ignored in dealing with any comparison between the post-war years of the first war and those which we are now enduring. It should also be remembered that this help comes because the United States, unlike His Majesty's Government where the movement for European unity is concerned, rises above partisan differences in their external policy and does not, refuse to help a Socialist Government whose ideology and system are the exact opposite of their own, and are even hostile to its continued existence. We heard a lot of talk about the moral of the recent presidential elections; except in their open hostility to Russia and Communism—in which we support them—His Majesty's Government are far closer to Mr. Wallace than to either of the great parties in the United States, and yet the United States continue, in a broadminded spirit, to keep them going.
It is on this footing and by this approach that I come to the Measure which is now before us. [HON. MEMBERS: "Hear, hear."] Well, no picture can be painted without due regard to the background. This Measure cannot wholly be judged on its merits or demerits, if such there be, except in relation to the general economic life of Britain and our position in the world, and also in relation to the United States on whom the Socialist Government and Socialist policy are living from month to month and from hand to mouth. Those are facts that ought not to be absent from our minds.

They are a condition of our dependence for the time being upon external aid.
When we come to the Bill itself there is surely no need to magnify or multiply the points of difference which divide the Government and the Opposition about the steel industry. They are, in all conscience, grave and numerous enough, and our affairs are becoming increasingly embittered thereby as our dangers grow. This is no case of one side seeking to nationalise an industry and the other side trying to preserve an uncontrolled, unsupervised monopoly or cartel without regard to the public interest. That is not the difference between us. We have heard from my right hon. Friend the Member for Aldershot (Mr. Lyttelton) the story of the steel industry since 1932, when it received the much needed protection of a moderate tariff and when a system of control and supervision was set up with the aim of making sure that the powers and opportunities secured to that industry were not abused. In this and similar matters the ideal for which all parties should seek to strive is to combine the maximum thrust, drive, contrivance and ingenuity of private industry under the natural stimulus and correction of profit and loss, and the immense power and economy of a vast co-operative unit of production, with the necessary safeguarding of the rights of the State, and of the interests of the consumers and the smaller producers.
I think it would seem to any dispassionate, fair-minded observer of our affairs that the British steel industry had arrived at a very considerable measure of success in these 16 tremendous years of war and peace. The facts, although undisputed, should be repeated. Steel production rose from 5 million tons in 1932 to 13 million tons in 1939, and now to 15½ million tons. Prices rose over the period before the war, but not more than was justified by the increased cost of manufacture. Continental prices, which had previously been artificially low, rose even more, so that by 1939 British prices were thoroughly competitive in world markets. The industry was enabled by returning prosperity to spend £50 million on new plant between 1934 and 1939. Thereby it increased its capacity by two million tons and thus prepared itself for its magnificent war effort.
Unemployment in the steel industry, which had risen to more than 40 per cent. under the Socialist Government in 1931, was rapidly—[Laughter.] Hon. Members laugh. They have no right to laugh at the miseries of the working people. Unemployment is a torment and a nightmare. If any of those hon. Members had worked as hard at the subject as I have, or were responsible for legislation of such far-reaching importance, they would have some right to lay claim to some position of superiority, morality, or sympathy with working-class problems. However, let me get back to the point that unemployment, which in 1931 under the Socialist Government had risen in the steel industry to over 40 per cent., was reduced under the Conservatives to 10 per cent. in 1937.
At the present time our steel industry is greatly respected in other countries and the names of its famous firms, the product of free enterprise, are national assets of the greatest importance. Steel is, of course, the main prop of our export trade. Nothing is perfect on the human stage, but one could hardly point to any other instance of an industry which plays so great a part in our productive effort and in world affairs without in any degree embarking on the exploitation of the consumer or harsh or improper practices. Let that assertion stand. During those 16 years there was a strong measure of Government control and supervision which protected the public without hampering the industry.
Except for the General Strike, which arose from causes quite unconnected with the steel industry, there has been no serious dispute or stoppage between the employers and the employed during this tumultuous century. It has been one of the few islands of peace and progress in the wrack and ruin of our times. Yet this same steel industry is the one which the Socialist Government have selected for the utmost exercise of its malice, and in complete disregard of national prosperity. When we compare the size of the tasks which confront us and the capacity of the Government to cope with them, it is astounding indeed that they should go out of their way to add to their troubles and to those of their fellow countrymen.
I should like at this point to take off my hat to the steel workers for the fine

work they are doing. The Minister pretends that they have only been working much harder because of the hopes of nationalisation. In justice to them, we should believe that they have broader and higher motives. Neither the promise nor the fact of nationalisation has produced such results in the coal trade. Indeed, under nationalisation fining is now being pressed forward because of the increased absenteeism. How, then, can this absurd and insulting allegation against the steel workers be sustained? I believe there was some complaint of statements which were made by the canvassers at a recent by-election of agreeable memory. I trust that the master of political manoeuvre opposite will carefully expunge from his leaflets and propaganda any suggestion that the steps which the steel workers have taken to help the country in its hour of trouble have been dictated by the gains they hope to make under nationalisation.
In drawing up our line of battle for the grievous and untimely quarrel that is thrust upon us, the Conservative Party in no way abandons the necessary control of the steel industry which has been so long in operation. We certainly consider that the price controls which we ourselves introduced and endorsed, must be taken as an essential and permanent feature of our policy. Neither do we regard the steel industry in its present state as incapable of further reform. I was reading in the "Manchester Guardian" last week a very thoughtful leading article which raised these points. In the Steel Board, which the Government's policy forces out of existence by their plans of nationalisation, we had an instrument at once powerful, flexible and comprehending under which modern needs and emergencies in all their variations, many of them unforeseeable, could be dealt with as they arose.
The right hon. Gentleman the Minister of Supply—I would venture to address him personally for a moment—yesterday pointed to the integration of the Bethlehem Steel Company and dwelt on the virtues of concentrated management. He was asked a pertinent question: Management by whom? Is it to be management by business men under all the inducements of profit and all the penalties of bankruptcy, or is it to be management by politicians interested in


their careers or prejudiced by their party doctrines, but otherwise not specially distinguished—or, I should say, who otherwise have their distinction yet to win—who are assisted in their task by officials themselves impartial in the sense that it makes no difference to them whether the industry shows a profit or a loss? For our part we are sure that the future expansion of the steel industry in its relation to our general economic life can be better carried out by the industry itself, and we have no doubt that it could get all the money it wants once the Socialist meddlers and muddlers stand out of the sunlight.
All these questions connected with trusts and monopolies are in our minds today. The laws of capitalist free enterprise America go much further than ours in dealing with trusts and combines. That was because 30 or 40 years ago those great monopolies, protected by an almost prohibitively high tariff, used their advantages in a ruthless way. Thus the antitrust legislation of the United States came into being. Here in this island the same issues have not arisen in a sharp form. Many things in this island are not pushed to extremes in every walk of life and in every relationship. That is one of the peculiar characteristics of our way of doing things, of our British way of life. It may well be said that the British—or, perhaps I might even say in this matter, the English—never draw a line without blurring it. That has been a great advantage to us in all sorts of vicissitudes through which we have passed. Therefore, we have not the same laws as have been carried by American democracy to regulate the behaviour of great trusts and cartels. Nevertheless, I have always held the view that where tariff protection is given in any effective form to a particular industry, the State should, if it thinks fit, make sure that the interests of the consumer are safeguarded, and also those of the smaller producers. It is for this reason that we Conservatives are proud to have been the initiators of the policy of the control and price-fixing system which regulates our, at present, buoyant steel trade.
There is another general point which I will mention here. We must not allow ourselves to be misled by any acceptance of the argument that steel is so vital to war that its direct control by the State is needed for military purposes. In the

last 40 years I have been from time to time much involved in our military arrangements. Never have I known any occasion when any Government has been hampered in time of peace in taking the military precautions it deemed necessary by any reluctance or refusal of the steel industry to meet those needs. As for wartime, we took complete control.
The Socialists have no right to revile Conservatives as being the sordid defenders of vested interests and private property regardless of our country's welfare. There was that great day—I may remind the Prime Minister of it—in May, 1940, at the time of Dunkirk, when the House of Commons, with a Tory majority of 150 over all the other parties combined, and the House of Lords—"lower than vermin" as we are now insulted by being called—there was that day when this great Conservative Parliament in both Houses laid on the altar of national safety and victory all private rights, privileges, interests and powers, and confided to the Executive in a single Parliamentary day the entire control and disposition of the lives and property of every family in the land. I wonder the Prime Minister is not ashamed that such insults should be flung——

Sir Richard Acland: Will the right hon. Gentleman allow me——

Hon. Members: Sit down.

Mr. Churchill: Go back to Gravesend.

Sir R. Acland: Sir R. Acland rose——

Mr. Churchill: It is indeed a base and a melancholy sequel——

Sir R. Acland: It was a completely phoney Act.

Mr. Churchill: I have no doubt that the hon. Gentleman wants to make himself as good a footing in the Socialist Party as possible; I will not interrupt the thread of my argument to assist him. It is indeed, a base and melancholy sequel to such an episode as I have described that sacrifices so readily offered and made by a Conservative Parliament should be exploited in peace-time in the sectional interests of Socialist factionaries, anxious to prolong their enjoyment of the sweets of office, and have more patronage to distribute to their backers and friends.
I used to say in bygone days, and I repeat it gladly now, "Socialism attacks Capital, Liberalism attacks Monopoly."

Mr. Shurmer: Does the right hon. Gentleman remember what he used to say about the Conservative Party?

Mr. Churchill: If I were to try to recall at this moment all the utterances I have made during 50 years of public life, I should trespass unduly on the patience of the House. I therefore confine myself to the citation of such statements as I may consider relevant. At any rate this statement—Socialism attacks Capital, Liberalism attacks Monopoly—is one of a very general character. But what sort of monopoly is this which the Government seeks to create? There may be, indeed, a great element of concentration, monopoly and cartel in the present arrangements of the steel trade. That is why we have agreed to the controls, and instituted the controls and the price-fixing. But what sort of monopoly is this that the Government seeks to create? In its presentation to the outer world on whom we depend, and to the United States on whose subsidies we live, it takes the form of national State trading indistinguishable from that of the Russian Communist Government.
I do not dwell at this moment upon the proved incompetence of Socialist officials in State trading, or on the losses we have suffered and are suffering from their further misguided excursions alike into world markets and domestic production. There will be plenty of time to deal with these issues as the facts unfold themselves remorselessly to the electors. But I say that, in principle, the British steel industry now being presented to foreign countries, and particularly to the United States, in the form that this Bill proposes, will arouse against itself equally concentrated and probably more powerful forms of collective bargaining. We must expect to face in our steel exports equally monopolistic organisations, often aided by State subsidies, and the elimination of all beneficial aids which arise from the higgling of the market and the ceaseless process of trial and error from day to day, from which our export trade and, indeed, our international trade as a whole, have hitherto derived so much of their fertility.
I do not know what measures foreign countries will adopt from their own point of view when confronted with the Socialist State monopoly of British steel with whom their producers will have to deal, but I cannot believe that they will be of a helpful or grateful nature. I do not think that the monopoly firm of Strauss Unlimited will have a hearty welcome among the purchasers abroad on whom we depend. It may turn out, however, that agreements will be reached between both the high contracting parties at the expense of the consumers. That often happens.
It is when we turn our eyes to the domestic sphere that the malignity of this Bill becomes most glaring. My right hon. Friend the Member for Aldershot yesterday described to us the difficulties of applying nationalisation to so complex and diverse an industry as steel. The Government have recoiled from drawing a line throughout the whole industry at the basic production of, let us say, steel billets, leaving the higher applications to free enterprise. It is recognised, after much thought, to be plainly impossible to slice this industry horizontally. The picture drawn by my right hon. Friend the Member for Aldershot of the partitions which would have to be erected in some of our greatest steel firms between those parts which would belong to the State and those parts which are still free, and the difficulty of apportioning common services between them; that picture was, I think, conclusive. The Socialist Government, like everyone else, have recoiled from such a solution.
Thus in the Bill we have come to the vertical division. They are picking and choosing, and doing so on no principle but the caprice of a party Minister. No one has explained on what logic or equity Ford's should be spared, while other firms producing steel or pig iron primarily for their own purposes should be devoured. Perhaps the Chancellor of the Exchequer explained this to the American bankers on his recent visit. Perhaps he will explain it to us this evening; it will be most interesting: the picking and choosing, the caprice, and the authority, the decision, of a Minister, himself the representative of a party to whom he is responsible, to decide all these issues, whether they affect the facts or the merits, whether they affect the character of particular firms or a general principle. Of course, no man,


however hard he works or however great his capacity, could possibly have control generally over the whole field. He will be at the summit, but he has to devolve a great deal of these decisions to people utterly unknown to Parliament or to the public.
Now, on this principle of vertical—or, if you like, diagonal—division of the steel industry, 107 leading firms are selected for absorption by the State and 2,000 others are for the time being left outside this control. Naturally, the Debate yesterday turned upon the question of what will be the relationship between the State monopoly of the 107 firms comprising, of course, by far the most powerful and largest part of the industry, and the 2,000 who still remain free. There can be no doubt of the power of the State monopoly to ruin them one by one or even in batches. There can be no doubt that that is in the power of the Minister. The State monopoly will be conducted according to the present Socialist plan by the partisan representative of the Government, whose political future in his party depends entirely upon his proving how much better and more prosperous a State monopoly is than any form of private enterprise or trading. That is his target for tonight, his target for the future.
The Minister of Supply yesterday showed clearly that he has already prejudged the issue.
Do people fear"—
he asked—
that private industry cannot withstand the superior efficiency of public industry." [OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 66.]
The text of the Bill and his own words yesterday give the answer to this question themselves. There is Clause 29, which contains a statutory injunction obliging the State monopoly corporations to secure enough revenue
to meet their combined outgoings properly chargeable to revenue account, taking one year with another.
Let me quote the Minister again, He said,
they"——
the private firms—
may not extend their production to such a degree as to make the integrated working and efficiency of the major publicly-owned sector impossible."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 65.]

[HON. MEMBERS: "Hear, hear."] There were loud cheers then. Really, he is apparently in fear of a superior effort on the part of private firms and that is why these powers are taken in the Bill to enjoin upon the steel corporation the power to make sure that they are restrained from giving the full effect to all the virtues of production and efficiency which they possess. The big dog has to be fed full first. That is quite clear from Clause 29. If any goes short, it will not be he. However mismanaged it may be, the law we are asked to pass says, "All is to be made to go well with the State monopoly."
This is indeed a murderous theme. How will such a Minister as we see opposite, or his successor, mandated by the law we are now called upon to enact, treat these minor industries—or "spiv" industries, as he will probably soon be calling them in the jargon of Socialism; how will he be treating them if they become inconvenient as rivals? He spoke yesterday in honeyed terms about them, but who is so gullible as to believe that a Socialist industrial commissar—for that is what we are creating—bound by law and also by the need of making a show for his party's policy, will tolerate any competition by an inconvenient rival? He has them at his mercy. By a stroke of the pen he can deprive them of the raw material on which they live. Short of this, he can threaten and coerce them to any extent. Every grade of pressure can be applied or threatened. The kind remarks of yesterday are about as refreshing to the minor firms as the kiss of death.
Today the Socialists boast that they are the opponents of Communism. Socialist parties in every European country have been found altogether inadequate barriers against it. Indeed, as this Bill shows, they are the handmaids and heralds of Communism, and prepare the way at every stage and at every step for its further advance. The Communist text-books are full of this theme; they have been for years. Of the differences between Socialism and Communism, if I may make another quotation from the past, I said a good many years ago:
A strong dose either of Socialism or Communism will kill Britannia stone dead, and at the inquest the only question for the jury will be: Did she fall or was she pushed?


We can now already see that nationalisation and State ownership have been a great and costly failure in all the industries to which they have been applied, and this will become more obvious to the public with every day that passes. I am taking coal first as an illustration. I have always held that miners, working far from the light of the sun, should have special consideration.

Mr. Fernyhough: In 1926?

Mr. Churchill: Yes, in 1926 particularly. If the hon. Gentleman perused the story of those negotiations he would see how unjust is his interruption. Forty years have passed since I moved the Second Reading of the mines' Eight Hours Bill. In comradeship with Mr. Bob Smillie—I do not know if the hon. Member has ever heard of him, he was a much admired leader in those days—I introduced baths at the pitheads. I greatly admired the spirit of the miners in both wars and regretted that I had to deny so many of them the opportunity of winning distinction in the field to which they ardently aspired.
Nationalisation in the mines has already, largely by the creation of its incompetent and top-heavy, over-staffed and over-paid organisation at the top produced an average 20 per cent. increase in the cost of coal to the consumers whether it be for the home firesides or for the public services, power, heat, light and transport. That is a heavy handicap to all our production and above all to our export trade. There was a loss of £20 million last year in this nationalised industry, in spite of the increase in price, which affects us so seriously. I see that Lord Balfour, who is. I believe, the head of the Scottish Coal Board, stated the other day that this year the State monopoly of coal would show a profit of £5 million. It is, of course, quite easy for an all-powerful State monopoly of a vital supply to make a profit by raising the price against the general consumer. They only have to know what the loss was to make a provision in price that covers it. It is not so easy to measure the reactions of this price raising upon the main economy of the nation. It must certainly be most injurious.
Let me take another instance, now that we are asked to nationalise another industry; another instance of what is

already apparent. There are the State railways which have to compete with modern forms of road transport. We are informed that the railways are to show a heavy loss and such result will reflect upon State monopoly and State management. Can anyone doubt that a Socialist Government, having to brazen out its failures and fallacies, will throw its weight against road transport in all its forms, whether nationalised, or still free? I am speaking of what is going to happen in the minor firms in the steel trade. The machinery is in the hands of the Government. They are taking all power and their machinery is at once simple and overwhelming. They have only to raise the fares on omnibuses and other vehicles under their control until the deficit on the State railways has been wiped out through more passengers and goods being forced to use them. "We must make a success of our Socialist Railways," or British Railways—I believe they allow the word British in that connection.
How much greater will be the temptation of the Socialist Minister with a State monopoly of the 107 greatest steel firms in his hands to defend himself and his party from ever-growing criticism and complaint—how much greater will be the temptation for him to knock about these weaker brethren outside the compound and thus to demonstrate the failure of private enterprise and the wisdom and elevation of Socialist methods and ideals?
I say this is not a Bill, it is a plot; not a plan to increase production, but rather, in effect, at any rate, an operation in restraint of trade. It is not a plan to help our patient struggling people, but a burglar's jemmy to crack the capitalist crib—[Laughter.] The right hon. Gentleman laughs, but he lives on the exertions of 80 per cent. of industries still free and all his hopes are founded on their activities. Those free industries constitute practically the whole of our export trade. They are already hampered by having to bear the weight and extra charges of the nationalised services and the weight of enormous taxation. They are already cramped by a vast network of regulations, interferences and restrictions, but still they are carrying the whole burden of our life and represent our only solvent economic earning power.
By this Bill the 80 per cent. of whose exploits in these hard times the Govern-


ment frequently boast and dilate upon, are to be subjected to the deadly attack of the State steel monopoly, whose tentacles will stretch around, penetrate and ultimately paralyse every form of free national activity. At every turn the Socialist Government and party, whose reputation and survival are engaged in proving the success of their nationalising experiments will have the means of striking down every industrial opponent of their totalitarian or equalitarian—for they come to much the same thing in this case—designs.
I will make only one reference to compensation. We had a very thoughtful and interesting speech last night from my hon. Friend the Member for Central Southwark (Mr. Jenkins). I can only speak in general terms about this matter. I do not intend to develop it at length, because my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) will deal with it later on. No one disputes that Parliament has the right to acquire any property which the public interest requires, provided that compensation is paid. The Socialist Government have accepted the principle of compensation and have declared themselves opposed to confiscation; but compensation means fair compensation. Insofar as compensation is unfair, an act of confiscation has been committed. The best method for the compulsory acquisition of property is either agreement or arbitration on certain well designed principles. The system of taking over property compulsorily at its Stock Exchange market value from day to day is not fair to the shareholder——

Professor Savory: Sheer robbery.

Mr. Churchill: There may only perhaps be 300,000 steel shareholders, but they have their rights and are entitled to justice. The great mass of small investors do not watch the market from day to day and their holdings are not speculative in any sense. They place their money where they think it will be safe and fruitful and thus make provision for old age and darker years. Hardship is inflicted upon them when they are forced, against their wishes, to change their investment. But, in the case of steel, the conduct of the Government in buying compulsorily at the market value is

not only unfair, but it seems actually dishonest. We assert, and it is our sincere belief, that by their threats of steel nationalisation they have artificially depressed the value of steel shares.
But there is more than that. By the appeals which the Chancellor of the Exchequer and other Ministers have made to the leading firms not to increase but to "plough in" their dividends and the co-operation which they have received in consequence, they have definitely affected the market prices. Now they propose to expropriate at this artificially restricted price. What is peculiarly reprehensible about the transaction is that those who hearkened most to the Chancellor's appeals on national grounds—and we all know how heavy are the burdens he carries—will be the ones to suffer most. They will, indeed, suffer in exactly the proportion of the response they made to what was thought to be an appeal in good faith and good will and on grounds of patriotism and national interest. This is indeed a refinement of inverted justice.
It is not only the principle of compensation that is affected, but the personal conduct and political good faith of the Ministers concerned. Such conduct, unless explained or justified, deprives them of the right to speak in the national interest or to be believed if they do. The Bill prescribes the date at which the Government are to take over the assets of the companies concerned. There may be some significance about this date. I will venture for a moment to probe. Clause 11 fixes it at 1st May, 1950, or any later date in the 18 months following the passage of the Measure. First May, 1950, is evidently timed, not in relation to the process of taking over the steel companies or anything like that, but to the date of the General Election or to the date of the completion of the legislation under the processes of the Parliament Act.
Thus it serves a double party purpose. It gives the Government the utmost span of office, and at the same time presents the nationalisation of steel as the direct issue at the General Election. Other motives are more a matter of conjecture. To my mind the fixing of this remote date seems to have been the means by which the differences in the Cabinet were adjusted between the extreme


nationalisers and the more sober and responsible Ministers. [An HON. MEMBER: "Who are they?"] The Chancellor was a little belated in his laugh at that. He must not miss the cues which are set for him by the Lord President. It was possible, no doubt, to reach accord in the Cabinet on the basis of, "If we win the election, the steel Bill will become law, and those of us who choose to go on will be masters of the industrial future of Britain. If we lose the election we shall be out anyway, so there is no need to split among ourselves now." I suggest to the House that interpretation of otherwise difficult events.
A Bill for the nationalisation of iron and steel, which, the Government assume, has to go to and fro between the Houses under the Parliament Act, just ekes out the time. They can explain to their followers, having settled their internal difficulties, "We must hold on together until we have got it through." Such are the calculations which have involved the fate and prosperity of this vital key industry in the vortex of party struggles. It is for this purpose that the Government have not hesitated to disrupt the constitutional settlement which was reached 30 years ago in the Parliament Act. I say that this is not an economic Measure conceived in a view, right or wrong, of the national interest, but a party dodge to hold that gang together where they sit until they have run the full length of their term.
None of us have any right, let me say, to assume at this stage what the action of the other House will be, especially in relation to a Measure that cannot come into effective operation until the electors have pronounced upon it. We are evidently in the presence of elaborate political calculations and manœuvres of the Socialist Government, who are primarily concerned with their own party interests. The question of keeping the steel industry in state of prolonged uncertainty, and any consequent injury to the public interest that may arise therefrom, does not seem to have complicated Ministerial discussions in any way. I read in the newspapers that Mr. Lincoln Evans, a trade unionist of note, the Secretary of the Iron and Steel Confederation, said three days ago:
Unfortunately the fixing of 1st May, 1950, as the vesting date means inevitably that steel

nationalisation is to be made a major issue at the next General Election, and the industry is therefore to become a focal point of a bitter political conflict. We would have preferred it otherwise.
That is the statement of a man who certainly has the right to be listened by the party opposite when he testifies.
The Government say, "We are forced by our mandate. We told the electors in our election pamphlet 'Let us face the future' that we included the nationalisation of iron and steel. Therefore, we are entitled, nay bound, to use our majority to place a Bill for that purpose on the Statute Book." It is difficult to believe that this issue bulked largely even in Socialist minds at the General Election of 1945. I do not suppose that many of the electors concerned themselves with it at the time. There had been no election for 10 years. The bulk of the voters believed the promises which were lavished upon them. The victorious armies wanted to come home after all their toils.
So, steel was in the programme, but to pretend that it was an issue to which the electorate consciously directed their minds, or upon which they were instructed by political discussion, is humbug. On these lines it would be sufficient for the Socialist Party, at future elections, to put in their programme the word "etc." after any catalogue of legislative reforms. I say that the mandate which they derived from the electors at the 1945 election was as soon as possible to put the country on its feet again, to make us independent of foreign charity and to free us from undue war-time restrictions and severities.
I end with the same proposition that I submitted to the House at the beginning. This is not a Measure conceived and brought forward in the interests of the community or the State. It is a feature in party tactics intended to keep the Socialist left wing as far as possible in order, and the Government as long as possible in office. We had another example of this in the Budget. The Chancellor of the Exchequer, who also deals with all our economic policy, and so often calls upon us all to help him, had to pay his way with his supporters for what seemed in many respects a sensible Budget, by putting in something spiteful which would satisfy


the Left wing and would convince them of his continued ardour in the class war. Hence the capital levy, with all its unfairness and injury to saving. It is no use the Chancellor pretending that he introduced this on its merits. I rate his intelligence too highly. It was a sop which he had to fling to Cerberus.
Here now, in this Bill, is another instance of the same behaviour on a far larger scale. The Socialist Ministers must have something new to feed the flame of party strife and to prove that they still hate and are trying to maul the other half of their fellow-countrymen. The one thing that fills their minds, the one thing which they fear and shrink from, is the General Election, which is coming upon them, and which will end in obloquy and censure their dismal and evil reign.

4.50 p.m.

The Joint Parliamentary Secretary to the Ministry of Supply (Mr. Jack Jones): As the House knows, this is the first occasion that I have come to this Box to take part in the presentation of a major Bill. May I assure the House at once that I am not unmindful of my responsibility in so doing, and I realise to the full the inadequacy of any speech that I may make on this major issue. However, the usual courtesy, I know, will be given to me on this occasion.
We have listened as usual to a long oration by the right hon. Gentleman the Leader of the Opposition for whom I have a great personal respect. Today I find myself on a different battlefield. I remember when he and I fought together. Today we fight against each other. But it is the true essence of democracy that a man, who less than three and a half years ago, was making steel, can now be following the right hon. Gentleman the Leader of the Opposition. The right hon. Gentleman has taken his usual line of attack upon everything that can be found against His Majesty's Government: not a word of what this Government, of which we are privileged to be Members, have done. I want, before I proceed, to ask the right hon. Gentleman a very straight but a very fair question. As usual the right hon. Gentleman is jumping about a bit.

Mr. Churchill: What?

Mr. Jones: I repeat, the right hon. Gentleman is jumping about a bit. Today the right hon. Gentleman takes off his hat to the steel workers. Not many weeks ago the right hon. Gentleman referred to the workers of this country as being members of a democracy of Tired Tims and Weary Willies, and yesterday——

Mr. Churchill: Really! I have never applied any such term as that to the British democracy—never. I have applied it to some people, and they are not all in the category of manual workers.

Mr. Jones: I reiterate that the right hon. Gentleman the Leader of the Opposition referred to Tired Tims and Weary Willies. I repeat that, and today I ask the right hon. Gentleman, having regard to the speeches made by his supporters, who yesterday lauded to the skies the efforts of the skilled workers, if he would be good enough, and British enough, to withdraw that statement?

Mr. Churchill: I never made such a statement and what has been said by the hon. Member in all his simple honesty with which I credit him, is utterly divorced from the truth, and should never have been advanced by him across the Table of this House.

Mr. Jones: I do not retreat from the allegation I have made. I have it in writing that he made that statement.

Mr. Oliver Lyttelton: Read it.

Mr. Jones: The House listened yesterday to the Debate generally, and to my right hon. Friend. I am sure that the case which he presented to his supporters was of sufficient merit to commend itself tomorrow to an overwhelming majority of this House. It is not my intention, nor would I be successful if I decided to try, to emulate my right hon. Friend in putting forward the magnificent case which he did yesterday. But in my own way I would like to make my own contribution, more particularly from the point of view of a worker who has spent the whole of his working life in the steel industry, as my father did before me.
As this House knows, I have been privileged to have travelled far and wide and to have seen, not only practically the whole of our own industry on site in this country, but to have seen steel


works of all types in very many other countries. Therefore I can speak with a lifelong experience—an international experience if I may say so—and bring, I hope, intelligently, to the House, knowledge gleaned from within the industry in a practical way: not, as the right hon. Gentleman the Leader of the Opposition's supporters tried to bring yesterday—knowledge which they had gleaned after a few fleeting visits to steel works in this country during the recent Recess. It would have been a wonderful and a grand thing if they could have come to this House and said, "We speak with knowledge of what we saw" at a time when the workers needed their help. But their knowledge is the knowledge of people who have visited a few works, and in one case found only one person prepared to support nationalisation, and even he was struck with its fairness. If they had stopped members of the crew who were running the works they would have been told exactly what the workers thought.
In my opinion this Bill is one of the best Bills yet placed before this House in the whole of its history. It is a workmanlike Bill; it is a Bill which contains within it opportunities for all engaged in the iron and steel industry—those who are patriots and who have our country's best interests at heart—to give of their best. The passing of this Bill, however, is one thing. The passing of any Bill of major importance is one thing. It will be in its implementation, following its appearance on the Statute Book, that its real virtues will be seen. My right hon. Friend yesterday wisely counselled the House that dramatic changes would not happen overnight, but there is ample scope within the provisions of this great Measure for steady, effective and profitable steps to be taken by the Corporation immediately they take over.
The speeches made yesterday confirmed my own personal view that the Opposition are dismayed, because of the nature of this Bill. I sincerely believe that they had hoped to see a Bill presented to this House which could have been attacked, on the ground that it would cause dislocation, loss of harmony, discontent, and, worst of all, a reduction in the present splendid production figures which have never in the history of Britain been higher than they are today. It is a

remarkable thing that, despite all the Jeremiahs of the Press and the prognostications of Members of the Opposition and some of our so-called industrial leaders—all prophets of woe, the whole lot of them—that every hour that we are nearer to this Bill becoming law, production of steel increases. That is a fact. Facts are very stubborn things, and the figures which speak for themselves are an absolute refutation of the charges made, both in the speeches of Opposition Members, and in the Press, that if we dared to present this Bill, chaos would immediately ensue in this industry.
We have, of course, in addition the spectacle of one or two hon. Members, once on this side of the House, who could not see eye to eye with the Government in this matter. Indeed, we have been taunted with the fact that an ex-general secretary of my own trade union has written in the Tory Press against this Measure. I would, however, remind the House with reverence and humility that when our good Lord chose His Twelve Disciples He later found Himself beset by one Judas. Despite the opinions and actions of the insignificant minority who have joined the Tory Opposition to this Bill, I want to claim that it is well conceived on sound economic and business lines. I repeat, with emphasis, that it cannot but lead to what we all desire—the quickest possible recovery of our national economy and its continued prosperity.
The Opposition may rightly ask, they have a perfect right to ask, what is the basis of approach by the steel workers, these ordinary fellows, men such as myself, sons of toil who, generally speaking—there are exceptions—sweat and slave, swear and drink, yet withal, judged by results, are some of the finest men of any nation. They have a very simple line of thought on this problem which, for obvious reasons, cannot be understood by the Opposition. Their approach is simply this, that any Government has a perfect right, judged by all standards of equity and justice, to see to it that the geological wealth given us by a beneficent Almighty shall be used—ought to be used—in the best possible interest of the country at large, and never in the interest of the privileged few.
That is the simple line that these men take. They are simple, ordinary, thinking


fellows. In other words, they believe that they are justified in claiming that the geological wealth of our nation, from which steel is made, should be harnessed to their skill, brains and brawn, and that the results accruing therefrom should be used for the benefit of the nation at large. After all, they argue, what is the difference between iron ore and coal? What is the difference between dolomite, limestone, and iron ore, all mined from the same source, all coming from the earth?—the earth which, so we are told, is the Lord's—not the Lords Temporal. They believe that the earth is the Lord's and the fullness thereof, and for everybody who dwells therein. A simple line of approach. It sounds too simple, I know, to be appreciated by the Opposition.
The Opposition would have the nation believe that steel nationalisation is a newfangled idea; something new. This, of course, like many other of the Opposition's beliefs, is a complete fallacy, and absolutely contrary to the facts. In 1932—and these are the documents, which I present for the perusal of the House—the executive of the Iron and Steel Trades Confederation of this country presented to the then Trade Unions Congress of the country a complete case for public ownership and control. The T.U.C. of that time, after a most careful perusal and analysis, and very careful research into the whole problem by its accredited representatives of the many millions of workers in this country, adopted this scheme in 1934—and adopted it unanimously. They gave the thing two years careful thought and perusal. That was 14 years ago. Therefore, this idea of the nationalisation of steel is nothing new. Not to steel workers, at all events; though it may be to Members of the Opposition.
There has, of course, been some talk—land it was, indeed, mentioned yesterday—that the workers themselves do not want nationalisation. That was definitely said in this House. Never was such nonsense uttered by responsible people, who ought to make themselves acquainted with the facts and not go snooping round looking for one odd person to go to the Llandudno Conference; they ought to get the facts of the whole position before making such wild statements. I defy the Opposition—and they have had access to the records—to find one minute against

nationalisation recorded in the minute books of our 634 branches in this country—and that is where democracy has its heart, where it breathes and has its being. At every area committee meeting, at every divisional conference, at every executive meeting and every national conference, they have reiterated their desire, right up to the present date. Indeed, so right up to date are they that since coming into this House I have had handed to me a copy of a letter dated 16th November, which is today. At this moment the executive council of the Iron and Steel Trades Confederation are meeting in this great City, and this very morning have sent this letter to the Minister of Supply. This is the text of the enclosure:
The Executive Council of the Iron and Steel Trades Confederation welcomes the steel Bill and places on record its satisfaction that the Government are now introducing a measure to bring the industry under public ownership.
It repudiates the suggestion which has been made that the workers in the industry are opposed to nationalisation. Its policy on this question has never altered since it first advocated the scheme of public ownership of the industry in 1931 which was later adopted by the Trades Union Congress. Since 1945 it has accepted assurances given by the Government that within the lifetime of this present Parliament the industry will be nationalised, believing that this course is necessary for the future of the industry and the well-being of the country as a whole.
The Confederation, as the principal trade union in the industry, assures the Government that its members will do all in their power to ensure the success of the scheme when it becomes law.
That is a letter giving a resolution passed this very morning: a reiteration of the workers' views of the last 16 years, and of their intention to stand by this Measure.
One could deal at length with the type of wishful thinking that has been put forward, particularly from the Opposition back benches, and I hope that we shall not hear any further of such arguments in the course of this Debate. [HON. MEMBERS: "Yes."] Indeed, I hope not. Are we again to hear the argument that steel workers do not want nationalisation? [HON. MEMBERS: "Yes."] All right. Reference has been made to articles in the "Sunday Times," written by Mr. John Brown. In the Journal of the Iron and Steel Trades Confederation for October, 1948, there is a reply to Mr.


John Brown, written by the present general secretary of the Confederation, Mr. Lincoln Evans:
There is no evidence to support his view"—
that is the view of Mr. John Brown—
that the attitude of steel workers has changed since he retired from office, or that the policy of the organisation on nationalization—which he took some part in shaping—does not now reflect the opinion of the rank and file. Why he should think so I cannot say because the policy of the organisation on this has never changed or wavered. …
The workers in this industry do not want again to see a return of the days when for weeks and months on end there was no work for them; when two or three days were a normal week's work spreading over a period of years"—
and so on, absolutely contradicting the statement that our people have deviated from the stand they took so many years ago. What did John Brown himself, our former general secretary, say in 1944 in regard to post-war reconstruction of the iron and steel trades?
As the war approaches its concluding stages it becomes necessary to consider the problem which confronts the iron and steel industry and prepare plans to meet the postwar conditions within which the industry will have to operate. Public opinion will not tolerate a powerful combine placed in a position virtually to dictate its terms to the Government, and will refuse to agree to the concentration of large powerful interests in the hands of a small body of directors which may place them in position of economic and political dictatorship.
Those are recent statements about the views of the two gentlemen referred to in the course of this Debate. I will leave the House to judge for itself the position of the workers in this great industry. I suggest to the Opposition that this membership has always shown itself fully and completely behind this Bill, and will seek to implement the terms of it to the fullest extent.
Having read these statements, I want to ask the Opposition a very serious question, with all sincerity—and I know the Opposition will take it as being a sincere question: Do they really believe that the workers in this industry wish to leave this enormous economic and political power—for it can be both—which was used so effectively against them, in the hands of those people who failed them so miserably in the years past? Do they really believe that that is so? I have no desire——

Mr. Peter Roberts: If the hon. Gentleman wants an answer, perhaps he will permit me to supply it. As I understand it, the hon. Gentleman makes the point that 100 per cent. of the workers in the industry—he said it was complete—are in favour of nationalisation. Is that the proposition he is putting forward?

Mr. Jones: What I said was that there was no recorded minute—[HON. MEMBERS: "No."] Oh, yes. What I said was that I defied the Opposition to find one recorded minute—even a minority minute—in any one of the minute books of the 634 branches of that great organisation. Of course, there is the odd fellow here and there, and that odd man will seek to let his views be known; and the Opposition will seek to find that odd man so that they can try to convince the House. The Opposition, I suggest, would prefer the odd man. I have no desire—[An HON. MEMBER: "Come to Sheffield."] I have been to Sheffield, and I was born near Sheffield, but hon. Members of the Opposition have only been going to Sheffield recently. A week last Saturday, in Sheffield, 21 branches of that organisation met and reaffirmed their decision to support nationalisation.
It is just as well to remind the House that power has been in the hands of the steel barons under a Tory Government—not with the management at the workers' level; they were powerless. I mean power in the highest sense of the term. During the whole of the inter-war years, taking the country as a whole, unemployment in this industry never fell below 18 per cent. and was as high in 1931 and 1932 as 48 per cent. The tragedy at Jarrow could never be eliminated from the minds of our men, nor could the miserable record of those responsible for it. What were the real effects of such things as combines, cartels and the quota system? The quota system was a system under which firms were fined when they produced more steel than was allocated to them. Is that the system to which the Leader of the Opposition referred today when he spoke of fines for absenteeism?

Mr. Ivor Thomas: Mr. Ivor Thomas(Keighley) rose——

Mr. Jones: When this subject is mentioned, up jumps a one-time Member of our Party. What was the effect of bonus shares, the payment of dividends,


earned by works only in partial production, but paid over to shareholders holding shares in companies which were not producing at all? All these things prove the case against the system which prevailed, and which would, the steel workers fear, prevail again if power were given to or left in the hands of the old owners. I know something of the claims of the Tories to a change of heart. For instance, there have been these few visits to steel works by Tory M.P.s during the Recess to learn all about the industry; to these visits I have already referred. We intend, however, to make very certain that any fears about the past will be eliminated by the passing and implementation of this Bill.
May I now leave the past and come to the more immediate position. [An HON. MEMBER: "Hear, hear."] Oh, yes. After all, the right hon. Gentleman, the Leader of the Opposition has said that it is as well to commence with some background, and what is good for the Leader of the Opposition is not bad for a junior Minister putting the case for the Government. There is an old saying in Lancashire that what is good to take is not bad to give, and hon. Members opposite must take as well as give. What is the position of this great industry today? I declare to this House here and now that the contribution to our national recovery at present being made by the steel men of this country, and I include management as well as the men, is a glorious example of what men with a sense of responsibility to the nation can do. Despite this so-called menace, this shadow that hangs over the industry, the tonnage figures prove beyond doubt that, as we approach the day when this Bill becomes law, production goes up.
Why is this? It is, of course, the direct result of these grand fellows giving of their own free good will a continuous working week. Without any prodding or urging, they gave the continuous working week, which was not easy at a time when most industries were reducing their hours of labour. It was not easy for these splendid patriots to commit themselves to a complete change of working hours and the sacrifice of many week-ends' leisure. They sacrificed the few hours of recreation and sport, the company of their wives and families and the exercise of their religious convictions. One would assume from hon. Members of the

Opposition that the increase in the last 12 months of nearly a million tons of steel was created by some magician resident in Steel House or in the Tory clubs of Great Britain. It is the result of the great sacrifice and effort made by these men who are now working under this Socialist Government, their own Government, and working under the firm, solid pledge of nationalisation. Let the House make no mistake about it. [Laughter.] Hon. Members of the Opposition may laugh, but it is because of their ignorance of the opinions of these men, because of their lack of knowledge about these men, knowledge which they cannot expect to get by fleeting visits during the Recess. If they knew the real opinions of these men, they would know that what I am saying is the truth.
In their letter to the Prime Minister last year, demanding nationalisation of the industry, these men demanded immediate nationalisation and the implementation of the Government's promise, while Tory hon. Members and others were trying to throw the shadow of doubt on what the Government's intentions really were. I want to tell the House with complete conviction that the continuous working week was not agreed to for the purpose of increasing dividends, nor because of any peculiar or particular affection which these men have for the capitalist system. Not at all; it was for the sole purpose of increasing production and bringing about sooner, rather than later, our economic recovery. It was an example unparalleled in our history. These men kept faith, and this House will keep faith with these men.
I want, if I may, to digress and to change the scene from the question of production generally to the specific case of a great producing centre. I refer to the position of Brigg, which is close to Frodingham and Scunthorpe, and to the recent by-election held there. Brigg is a constituency in which there are some of our finest steel plants, and, indeed, some of our most progressive-minded managements, but, above all, it is the home of very many thousands of steel workers. The Tories fought Brigg, and the whole weight of the Tory machine was brought to bear in that constituency during the last year, and, indeed, anti-nationalisation of steel was the mainspring of their attack. That constituency, dependent partly on agriculture but mainly on steel,


remained faithful to the Government, with the result that Anthony Fell—that was the name of the Tory candidate. It was unfortunate for the Tories that, while they went round the constituency preaching chaos and woe, in the course of the election campaign, these men broke all their own production records. It was a case of why, not how, were the mighty fallen. The result of the by-election at Brigg is well known to the House, and the hon. Member for Brigg (Mr. E. L. Mallalieu), in his inspiring speech yesterday, provided confirmation of what I am now saying in regard to the position of the workers there.
What else are the steel workers giving to our nation? It is not generally known, because they are not a publicity-seeking organisation, and prefer to be known by their deeds, not words. The fact is, however, that, at the commencement of the recent war, our men agreed to a complete freezing of their existing wages. Wages which are tied—and this is important—to the selling price of steel would, at this very moment, because of the existing selling prices of ships' plates upon which the men's wages are based—and the right hon. Gentleman the senior Member for the City of London (Sir A. Duncan) knows this to be an accurate statement of fact—be giving these men in their wage packets 128¾ per cent. above base rates.
It will interest hon. Members who did not know it before to hear that every 2s. 6d. that goes on to the price of steel means 1¼ per cent. to these men. Because of the existing price levels they would be getting 128¾ per cent. They are still being paid at the frozen rate of 67½ per cent. on their basic wages, and the difference of 61¼ per cent. is what the men have sacrificed, and proves their desire not to exploit the country both when at war and during the present economic battle. That is a grand contribution, and if the steel owners and those in control had made the same contribution in regard to profits, what a different story could be told! Our men took in lieu of that sliding scale arrangement a cost of living bonus, and that bonus gave to the labourer exactly the same as it gave to me, the £3 10s. 0d. a day worker, in addition to his base rate.
In addition to all this, these men have a proud and magnificent record of work throughout the war years. They kept up peak production despite the terrible blackout conditions. It may interest the Opposition to learn these things, but I merely quote them to show the tremendous contribution which these men made, and are still making. I ask the Opposition, and, indeed, the House generally, do not such men, along with their brothers in other basic industries, deserve the carrying out of the pledges given by the Government? I say emphatically that they do. May I suggest to the House that these men could have taken a very different line. Had they lost faith in their Socialism, in the Government's pledges, or in the contents of "Let us Face the Future," what could they have said or done? "No continuous working week before nationalisation" could have been their slogan. But, to their eternal credit, they remained faithful. I repeat that we must keep faith with them.
I turn now to some of the special virtues which this Bill possesses—the retention of names, goodwill and management. It is as well to speak of the past—I am not worrying about the time; I want hon. Members opposite to know what they ought to have known long since. Their recent specific interest in steel is rather remarkable. Had they shown the same interest in what they call "the good old days"—"the bad old days" as we knew them—they would not need to be told now. I repeat, I will turn now to the virtues which this Bill possesses—the retention of the names of the companies, the goodwill and the managements who have complete freedom under this Bill in day to day matters provided, of course, that they prove themselves efficient. This, to my mind, is a splendid thing. The remaining in office on the same premise, subject, of course, to proof of efficiency of the existing directors, is, I believe, a very different method from the one which the Opposition expected.
I am not, of course, suggesting to the House for one moment that all managements and directors are of the calibre which this industry deserves to have, nor, indeed, as the House knows—I have often said it before—am I claiming absolute perfection on the part


of the whole of our men. This Bill provides the Corporation with the necessary power to deal with inefficiency arising from nepotism and any other cause. It provides the opportunity, so long denied to both management and men possessed of the necessary qualifications—and there are many—to function in the highest possible positions.
How often have I met managers—not only in one works—suffering from a sense of frustration because of the lack of progressive minds on the boards of directors. How often have I seen fine, good men who have given a lifetime of service held back, while youngsters, through marriage or other relationships, and almost straight from college or from the Army, have been placed in authority over them, and with what dire results. [HON. MEMBERS: "Name them"] I can name them if hon. Members wish it. I can furnish hon. Members opposite with the names and addresses of these people. As individuals, they are respectable citizens; it is the system I am denouncing. This is not the place in which to name individuals, and it would take me a long time to name the lot of them. The House should be made aware of this type of restriction which debars good practical men from taking over higher positions.
Let me quote my own personal experience—and the right hon. Gentleman the senior Member for the City of London knows this to be perfectly true. I had competed in open competition for, and gained, the managership of the State-owned steel works of Turkey. Immediately my own company's chairman of directors heard of this, he sent for me. I worked for that company for 32 years, and that was the only time I was ever in his inner sanctum. The outcome was the offer to me of the assistant managership in my own works, but the condition was definitely laid down that, "You will, of course, leave your union activities and cease membership of it." There is at the present moment in this industry a clear cut line of demarcation above which men cannot go unless they are prepared to sell their souls and relinquish their union activities. The House can imagine what my reaction was. I determined to stay in England with the men of whom I am so extremely proud, hoping that one day—a hope now fulfilled—I could fight such

a system. I mention my own case—it is one of hundreds—in no spirit of "sour grapes." That company was, and still is, in many ways a worthy employer. They were kind to me in many ways, and I pay tribute to them for it. I have a wholesome respect for them, and they for me. At the same time, it suffers very sadly from nepotism. It works on the system of "who you are," and not "what you are."
I repeat, let it not be thought that we on this side of the House, whilst paying due tribute to the very many efficient directors, managers and technicians, are satisfied that there is little or no room for improvement. Under this Bill, such questions as welfare will receive the attention they deserve, and which is long overdue. The financing of research is provided for. At the moment there is quite a bit of research, but not sufficient by a long way.
The Bill provides for education for young entrants into the industry. That is a tremendous step forward. At the moment, education is dealt with spasmodically with no cohesive or overall national policy. By and large, a general national policy is not in being at all in this industry. There are many technical problems upon which I could discourse at length. Some are receiving a bit of attention, but they will receive much more. We are far behind some of our major competitors in such questions as oxygen induction. Some hon. Members opposite know exactly what that means. The right hon. Member for Aldershot, on the Front Bench opposite, knows that America has adopted it with complete success and that it is proving a great boon in producing steel at low costs. We are far behind our competitors in that type of matter.
Then there is the vexed question of the right type of refractories, which give longer life and cheaper maintenance of producing units, and result in higher production at a much lower cost. I would like to give the House evidence of what I mean. In 1936, the company for which I worked in Lancashire built what is called an all-basic magnesite furnace. We were privileged to be the first men selected to do so. The furnace proved to be a success—not because of my efforts. I was one of a crew. Output went up more than 20 per cent. and coal


consumption went down. Maintenance of the unit was reduced to an almost negligible amount. The result was that steel was produced at a very much lower cost than on any other unit in that company. The materials that were used for that furnace were brought from Austria.
Remarkable as it may seem, we can make, and we are making the raw material for this form of refractory from sea water, in a Government-owned, Ministry of Supply factory. It is the only factory of its type in Europe. Last year it produced 18,000 tons and this year is in the process of producing 26,000 tons. The activities of my right hon. Friend will next year be extended to produce something like 40,000 tons. Sea water is cheap. We do not pay royalties on sea water. I want to ask the Opposition, and the right hon. Gentleman in particular, whether any interest is being shown in this matter and why we have not had a tremendously increased use of this type of refractory. The answer is to be found where most answers to this type of question are to be found, and that is in the vested interests which the present steel owners have in the other type of refractory, the silica refractory. I could give the House details of cases where bricks were used for furnaces, when I, as a practical man, knew that they were hopeless and useless for the purpose. They had to be used, because vested interests were brought into the matter against the better type of brick. That is the sort of thing of which I have knowledge. The House can rest assured that my right hon. Friend and I are giving this matter our urgent attention.
Consumers' interests are provided for in the Bill, which also provides for the setting up of works councils. That is another very important step forward. These councils should be and can be, and indeed will be, real, live ones and a forum for statesmanship inside the industry, where facts and figures of costs which are now denied to workers' representatives can be fully explained and action be taken thereon. We could never get these facts and figures before. I have spent 32 years trying to get them, so I know. These councils will allow a real opportunity for the acceptance of individual responsibility. No

more shall we hear the cry, "This is not your business." The future efficient running of the industry will, literally, be everybody's business, as it should be.
The men's wages have, throughout the ages, been agreed upon after long and often weary negotiations, to the fine limits of one ten-thousandth part of a penny. The companies decided, in conjunction with me and my type, what that rate should be, but I never had the opportunity of deciding what the directors' wages should be. Those days are still to come. So far as the workers are concerned, we could never get within many hundreds of pounds of the correct figure for directors' payments. Those days are going. Now we are going to get some assurances.

Mr. Lyttelton: The hon. Gentleman may have given the impression that works councils in the future will be charged with the settlement of wages. I am sure that he does not intend to do that and that is why I have intervened. Perhaps he would like to make the point clear.

Mr. Jones: I thank the right hon. Gentleman very much for his intervention. He has raised a very important point. I repeat that these works councils will be a forum for real statesmanship inside the industry and not for the settling of wages. Works councils in this industry never interfere with the autonomy of wage settlements, as the right hon. Gentleman knows. Those matters are always settled by the appropriate body. That body will be decided by the Corporation, with whom I hope it will work efficiently and harmoniously. Wages will not be discussed at the works council.
These councils can make a positive and real contribution. They will be held where no secret will be hidden, and that will give enormous satisfaction. They will be able to discuss problems such as the saving of material, better output, the concentration of materials in the right place and at the right time. I have not the time to go further into this aspect of their functions. My right hon. Friend rightly said on Monday that discipline will be maintained and that these councils will be no contradiction in regard to the discipline which is so important in industry. I want to assure the House that the steel men are used to the recognition of a "boss," or "gaffer" as he is called


in the industry, provided that he is the right type of fellow and knows his job. That system of the recognition of the discipline of the right type of man will continue, provided he knows the job.
Now I would like to give the House a few figures which I hope will not be boring. I am sure they will not be. They should prove a very interesting point which I want to raise. It is the question of lack of spare capacity in the past, and, indeed, at this very moment, to absorb effectively the labour force engaged, particularly those possessed of the highest skill. In the trade union organisation with which I am connected, we have rules which allow a man who is unable to work, through no fault of his own, to pay reduced contribution. Therefore we know, by an accurate census and a check on figures which are produced monthly, that millions of man-hours have been lost annually because of the lack of spare capacity to absorb men when their own unit was out of commission.
I would like to give figures from the time that the scheme was set up for the industry to put its house in order and to do what was right by the people of this country. Let me give these authentic figures of lost man-hours. They were: in 1933, 19,409,232; in 1934, 17,388,624; in 1935, 18,839,760; in 1936, 17,118,124; in 1937, 14,373,168; in 1938, on the eve of the war, when capacity should have been at its best and when we should have been prepared for every emergency and contingency, they came to the terrific amount of 43,468,560. They were production hours lost in the industry because of lack of spare capacity to absorb men in the plant at which they were engaged.

Mr. William Shepherd: Why did the hon. Gentleman vote against rearmament?

Mr. Jones: I did not. Do not ask silly questions. What we voted against was the fact that rearmament should ever he necessary, and I would do it again. If we did vote against rearmament, the country was then governed by the Tory Party and they could make decisions governing Steel House and the Federation and put the matter right. I want to make it very clear that these men were not men who were unavailable for work and unemployed as such. In the main they were highly-skilled production

experts who were on the books and pay rolls of various companies and were available for work. They were denied work for no other reason than the lack of provision of extra capacity to absorb them, such being the planning which the Federation promised to carry out when it received Government aid and support during those years.
What would the Opposition have been saying yesterday or today—what would they say tomorrow—if these tens of millions of production hours had been denied to our country because of strike action or absenteeism? I ask the Opposition what they would have said. Quite an amount of talk has been bandied about concerning the good relationships and the fact that there has been no strike in the industry for over 40 years. I suggest that these men were losing sufficient time without losing any more because of strikes. This would have meant that the industry would not have existed at all. Strike action with figures like that? There was plenty to strike about, but good statesmanship on both sides—I pay regard to both sides in that industry—prevented lots of strikes which could have happened in those years.
During the whole of these years to which I refer, selling prices of steel were increasing. I could talk to the House for hours on end about this. Immediately after the 1914–18 war, prices rocketed, and ships' plates went up to £24 a ton. The sliding scale went up to 190 per cent. and came down within two years to 27½ per cent., and prices came down to £11 a ton. That shows the terrific effect of boom and slump resulting from the great increases in prices. "Peak up" and "peak down" is not what we want, and this Bill makes provision to that end. During those years, selling prices for steel increased, proving that there was a demand. My knowledge of industry and of general economics prompt me to believe that when prices go up there is a demand and that when there is a lack of demand prices come down. It was always the policy to keep production below demand and thereby keep up prices. I could talk to the House for a long time on the subject of the price and the percentage basis, but I think I have said sufficient to illustrate the point. This sort of thing prevents the production of the highest volume of all classes of steel at the lowest


possible cost and it is this sort of problem with which the machinery in the Bill will deal.
There are the problems of cross-hauling, the hauling of huge quantities of steel up and down the country; bottlenecks such as those in electrical sheet and wire production; and sufficiency of steel for the motor and shipbuilding industries. Those problems still affect the selling price of steel. Recently the Federation produced a plan involving the expenditure of £168 million but that sum did not include one penny piece to provide for the compensation of redundant workers and the effects of concentration, such as in South Wales. That is the type of thing about which workers are worried. They fear for the future if the industry is left in the hands of the people now controlling it. I suggest to the House that all the sociological results arising from concentration can be much better dealt with by the Government than by the individuals concerned.
Finally, I want to say, and stress again with emphasis, that this Bill provides every opportunity for all who serve within its provisions to give real service to our nation in its hour of greatest economic need. It has been, if I may very humbly say so, a privilege to have been allowed as an ordinary steelworkers' representative to put these observations before the House. They are not, as has been suggested, observations born of or based on political spleen or industrial venom. They are based on a sincere regard for our national well-being. In short, my support, and that of those whom I have the honour to represent in this Mother of Parliaments, is a sincere, yet, I hope, humble contribution to this Debate in the fervent belief, and with complete conviction, that this Bill, when implemented, will secure immeasureable benefits for our nation. I ask the House to give this Bill the resounding majority it deserves and so enable a system of society to be created in which all men shall live as Almighty God intended all men should live.

5.46 p.m.

Mr. Clement Davies: The Joint Parliamentary Secretary to the Ministry of Supply began his speech with a request to the House for indulgence inasmuch as he was going through the

ordeal of speaking at that Box for the first time on a major Bill and, moreover, had the tremendous task of following the right hon. Gentleman the Leader of the Opposition. He need not have apologised. As he knows, the House always listens with respect and appreciation to any man who addresses it with sincerity and speaks from conviction and experience, and that, we know, has been the attitude of the hon. Gentleman. He undoubtedly acquitted himself so well as to earn the cheers of his colleagues.
On any question of the nationalisation of any industry there are two lines of approach. One is the political one, or, if it is preferred, the ideological one, and the other one is the economic one. The one that was followed by the Joint Parliamentary Secretary and the Minister of Supply was the ideological or political one. It is one which undoubtedly appeals to a great number of hon. Members on the other side of the House who are supporting the Government. I can understand it. It is, or at any rate was, the ideology of every member of that party. They committed themselves to it before they were allowed to become fully acknowledged members of the party. It was that the present position with regard to any industry is so unsatisfactory that there is only one solution—nationalisation, the nationalisation of all the means of production, distribution and exchange. Once having made up their minds with regard to that, further argument is unnecessary. It is not necessary to enter into any detail or bring forward any reasons. All one has to do is to say, "Here is an industry. It is one of those which are productive or distributive and falls within our general line and, therefore, it is unnecessary to bring forward arguments in respect of it."
As the right hon. Member for Aldershot (Mr. Lyttelton) said yesterday, that is the attitude of mind of the hon. Member for Broxtowe (Mr. Cocks). He has never made any suggestion otherwise, and I think it is the attitude of a number of the colleagues of the Minister of Supply. But it is not the attitude of mind of all. Some, undoubtedly, today would like to approach this, not from the ideological, but from the economic, angle. On the economic aspect the question is—Is the industry satisfactory? Are there any real troubles with regard to it? We proceed from that to the question—What is the


best method of dealing with the industry, taking every consideration into account, and what, then, is necessary in order to give the best service to the people as a whole? I am glad the Minister of Supply appreciates that. So does the Lord President of the Council. I should have thought that that approach to the matter differed entirely from the ideological or political approach, for the ideological or political approach is the approach of the Socialist. As I said, I can understand it, but I do not agree with it.
To my mind, that method of approach is outdated and outmoded. What the Socialists are really trying to do is to apply some ideology or slogan which was invented 100 years ago to entirely different circumstances, and rather than taking a forward attitude, they are taking the backward—Conservative—attitude. Moreover, followed to its logical conclusion, that approach leads inevitably to complete totalitarianism and the slave State. Therefore, I am not a bit surprised that a number of the right hon. Gentleman's colleagues seem to have abandoned that ideology, and prefer the approach which I would regard as the approach of the Liberal Party; that is, to tackle every question upon its individual merits, and to look at it from that point of view. That is the approach which I thought had been accepted by the Lord President of the Council.
Let me remind the House that this is the third Debate that we have had upon nationalisation, and really the third Debate that we have had upon the nationalisation of steel. We had one at the end of 1945; we had another at the end of May, 1946, and this is the third. At the end of 1945 and in May, 1946, the Lord President of the Council accepted what I have just said. He said that the problem was how best would this industry work in the interests of the public as a whole. He then dropped his ideology and said that it was not a political question, and that he did not sympathise with those who shouted for nationalisation without giving any reason, or with those who shouted against nationalisation equally without giving any reason. He practically adopted my words—indeed, he quoted my words with approval—and said that what we had to do, was to approach this matter from the economic angle.
I say that the burden of proving that State ownership of the industry will be the best method of dealing with that industry or service lies upon the Government, and the burden of proving it must be carried out in such a way that all the questions are answered with conclusive evidence. It is not enough merely to make assertions. Anybody can make assertions. I heard any number of assertions from the right hon. Gentleman yesterday and the Joint Parliamentary Secretary today; but I have heard no proof. Therefore, the burden undertaken by the Leader of the House on behalf of the Government, and on behalf of the right hon. Gentleman who introduced this Bill, has not been carried. The only conclusion we can come to is that now the Government have dissociated themselves from the undertaking given by the Lord President, and fallen back upon the old ideology and slogan, and are bringing this Bill forward for purely ideological reasons—to which they are entitled, of course, but with which we disagree fundamentally.
Let us now proceed to look at this industry. Everybody agrees that this is a vital industry. All kinds of adjectives have been used with regard to it. The use of such phrases as "of vital importance," and so on, does not carry the matter very much farther. There are all kinds of industries and services without which we cannot exist. Steel is one of them. Without a doubt, coal is another. The most important of all is food. In a climate such as that in which we have to live, another is the clothes industry, and so on. However, let us all agree that steel is an important industry. It has passed through various phases. There was a period when, undoubtedly, we in this country not only held the premier position but dominated the world in the production and development of steel. Let me remind the House that that was when it was entirely under private enterprise. There was no suggestion at that time that there should be anything else but that. That was the phase that existed until, roughly, the beginning of this century.
Then came tremendous competition both from the Continent and from America; and undoubtedly we then started practically on a downward trend. We revived again, however when the 1914–18 war came. During that first period, thanks to the development of that


industry, we largely increased the standard of life and improved the conditions everywhere in this country, and added enormously to the wealth that this country had invested abroad through the export of steel and through the work which was being done by our contractors and manufacturers—so much so that we were able to bear the main burden of the 1914–18 war. Let that be remembered in favour of what was being done in the industry.
Now let me pass to the second period. Undoubtedly, we then came upon a really bad period. There is some excuse for it, in that, in the main, this industry supplies capital development and capital investment. This industry supplies what is needed for ships, railways, plant, machinery, buildings, and so on. Therefore, the demand that is made upon the industry varies according to the amount of development there is in capital works within the country or elsewhere. If that capital development falls, then this industry suffers. It has probably been more liable in the past to booms and slumps than any other industry, and we had better bear that in mind when considering policy. Then came a period of a fall in development and a fall in the demand for the product of this industry. With it came that disastrous period for those who were working in the industry, the tremendous unemployment. There is another matter. The costs of development in the industry are such that it requires a great deal of capital to start any new unit in the industry. For that reason, it is difficult to persuade anyone in the industry to destroy the unit which is getting obsolescent and may, therefore, be completely out-of-date. These are matters which we certainly have to consider.
What happened when we had this fall in production? The industry then asked for assistance. It turned to the Conservative Government of the time and asked for protection. Subsequently, it asked for subsidies and for assistance of various kinds. At that time the industry was told that it might get that assistance if it would reorganise. The industry did not succeed in reorganising itself very effectively, but there was a sort of better organisation. From that time, we had a sort of cartel having the defects of a monopoly without any of the usual advantages which go with a monopoly. By

that I mean that very often with a monopoly it is possible to cut down the costs of production, so as to give a better service to the people than otherwise would be the case; but I could not find that in this cartel. That was the condition of affairs when the war broke out.
I gather that nobody today is satisfied with that state of things. I gather that the right hon. Member for Aldershot and certainly the Leader of the Opposition do not consider that that condition was completely satisfactory. Certainly the Government do not consider it satisfactory. Speaking on behalf of all Liberals, we cannot regard it as satisfactory either. Monopolies, as the Leader of the Opposition said, are anathema to Liberalism. If I may refer to what he said and finish his quotation for him, he referred to the Socialists, in the past, attacking capitalism and the Liberals attacking monopolies. He might have gone on and said that the Conservatives defended both capitalism and monopolies uncontrolled and unfettered. Speaking for the Liberals who still hold to the faith, I say that we still dislike monopolies, whether they are complete monopolies or semi-monopolies in the form of cartels, but what we would have liked would have been a full inquiry at that time into this industry to see what was required for its rationalisation and to see whether it could stand on its own legs.
Before I pass to this Bill, and what I think may be the effect of it, may I say that it is no good merely dwelling upon the past and saying what was the condition of affairs at that time; nor is it right and proper that one should look merely at what is happening today, for there have been great changes, not so much in the structure of the industry as in the circumstances surrounding the industry, leading to a tremendous demand for steel, a demand probably greater than anybody could have expected, and certainly greater than has ever been known before. Naturally, when there has been the stopping of industrial capital development during six years of war, and in fact the destruction of capital development in many places—in this country in particular, in France and elsewhere—it necessitates increased production certainly for a number of years. Therefore, the circumstances have changed.


When all is going well, cartels often develop many defects. They are not obvious at the time, but when circumstances change again and there is a slump in the demand, one sees these defects far more seriously.
One of the complaints that was made prior to the war was about high prices. I do not think there were very high dividends paid at that time, but that is a different matter; there certainly were high prices and that was largely because prices were so fixed that the inefficient as well as the efficient were kept going. Pooling them together, the prices were higher than they should be, which had the effect of lessening the demand, because prices often govern demand. What is happening today? Undoubtedly the industry has responded magnificently, and I would not make any exception in regard to either side, management or workers. We have now reached a position which was not even contemplated during the war. We are passing production today already at over 15½ million tons. That is to the credit of all of them, and further, the prices, to the credit of all of them, are extraordinarily good. They are lower than in America if we allow for the subsidies. There is also a plan for reconstruction which has met with the approval of the Government. What is more, the industry, under the control of the Government, has carried out every request that has been put upon it without exception.
It has been said by the Minister of Supply, I think, that his power has been a negative one. A negative can be so exercised as to become a positive, but can the Minister point to a single positive request made by him or his predecessors which has not been carried out by the industry? I do not think that there can be a single instance of that. The only comment which the right hon. Gentleman made yesterday was that at this particular moment, serving members of the Board had refused to serve any longer. Is that any argument one way or another, except that they disapprove of his methods of dealing with the situation? Supposing that he has the right of appointing directors and removing them in one day—because, after all, the structure which he proposes to keep on under this Bill need not exist for longer than one day—does it follow that everyone whom

he appoints will accept it, or will not quarrel with him as to the way of carrying it out. Therefore, we cannot draw any deduction from the failure of these men to serve except that they disagree with the policy of the right hon. Gentleman. We have got through the bad position. We have still a form of cartel and restriction, but we have complete Government control, and at this particular time, under that control, we have reached the highest point of production ever reached and have been able to do it at a price which would compete with any other country in the world.
That is the position. Thereupon, the Government decide to introduce this Bill. For what purpose? We are entitled to know what is the policy of the Government and, in order to further that policy, what organisation they propose to erect. It seems to us that they are putting the cart before the horse. They are asking this House for a blank cheque and saying, "You transfer the ownership of this industry to us, and then we will begin to think out what the policy and the organisation should be." That is the very answer which the hon. Gentleman gave today and which the right hon. Gentleman gave yesterday. In his speech yesterday, when dealing with the Corporation, the right hon. Gentleman said:
I do not propose to expound further the other contents of this Bill today, as if I did I would try the patience of the House too much. It would, however, possibly interest the House if I stated briefly the sort of work to which the Corporation is likely to devote itself in the early days of its life. The following matters will plainly be on its agenda. The establishment of relations with the companies it owns and in particular ensuring that these companies will have ample freedom of initiative and competition with which to carry on their activities.
I should have thought that was a question which they should have put to themselves at least 18 months or two years ago. They should have worked out the policy on paper and said, "If we had control, this is what we would do. This would be our organisation." Look at what the right hon. Gentleman said:
… will have ample freedom of initiative and competition …
How does one work in competition when one owns all the shares?

The Minister of Supply (Mr. G. R. Strauss): I will give an illustration. I understand that in the big Unilever com-


bine, which is a big holding company, many of the firms in the combine compete with each other very keenly in the sale of their products.

Mr. Davies: No. The right hon. Gentleman does not really know. It would not be right and proper for me to disclose to the House my own private information. [HON. MEMBERS: "Why not?"] If it were, I would give it. All I can say is that if all public companies carried out their duties towards the public as well as that great company, this would be a very wonderful country. But it is not right and proper that I should disclose information which has come to me privately. I assure the right hon. Gentleman that his statement is quite without foundation. The right hon. Gentleman continued:
… setting up the appropriate co-ordinating machinery with the various producers still in private ownership."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 73.]
What that shows is that all these matters have not been thought out and that what has happened is that those who prefer the old ideology of the party have had their own way. They have brushed to one side the Lord President of the Council who undertook to carry out the burden of proving what the policy and organisation would be and what the results would be.
I gather that the Conservative Party are now admitting that there should be some form of control. They do not tell us what that form is, nor the extent of it. I gather that they do not want to see quite the same position as there was prior to the war. I am entirely dissatisfied—and so are my colleagues—with the structure as it was before the war. We are not satisfied with the position today, although the figures are so good. The hon. Gentleman said that in the past production had been less than the demand and that it had been the policy to keep production below demand. I ask the hon. Gentleman whether it would be right so to increase the capacity as to meet the tremendous peak demand which there is today.

Mr. J. Jones: My right hon. Friend gave an assurance to the House yesterday that we would not expand beyond what was economically correct.

Mr. Davies: In other words, we have a capacity which is less than the peak demand?

Mr. G. R. Strauss: Certainly.

Mr. Davies: Therefore, when a slump comes we shall have a capacity which will be above demand. One of the most difficult tasks in policy is to adjust capacity to what is anticipated will be the average demand. Especially would that be true under this Bill where there is a Corporation which must make an overall profit. Whatever it loses on the swings it must make up on the roundabouts. All that will be put before us will be the general balance sheet. This is a very difficult question of policy and organisation. Have the Government thought for two minutes how difficult it may be, or have they got the answer as to what the price should be and to what it should be related? Do they know what imports will be required? We all realise that the amount of iron ore available in this country is getting less and less every day and that we shall have to rely more and more upon imports. Are the Government also to continue subsidies? They have power under the Bill to do that.
All these are matters upon which not only the House but the country is entitled to full information. Bearing in mind always the welfare of the people who work in the industry, and their security through good times and bad, the major question is how shall this industry be worked, run and organised so as to produce steel of the proper quality in the proper quantity and at a proper price that will meet the needs of the country and enable us to compete effectively abroad. That problem cannot be solved by answers across the Floor of the House or by assertions by the right hon. Gentleman or his hon. Friend. They have not attempted to answer it.
Before we pass such a Bill, we are entitled to have answers to these questions. I put them 2½ years ago in May, 1946. They were accepted by the Leader of the House on behalf of the Government. Have we or the country ever heard a word of proof since then? Not a sound. Everyone has been saying that this is a most vital industry, that the future of the country depends upon it, and so on. Why has the country been kept in the dark


for all this time? The Government have wasted three vital years. They should have instituted a full comprehensive public inquiry such as there was for the gas industry.
Why is this industry singled out, with all its complexities, for being brought within the ideology without a word of inquiry? It is different from the coal industry. There were a number of inquiries about coal. There were the Sankey Commission and the Samuel Commission. There was the terrible Bill introduced by the right hon. Gentleman's predecessors in 1929 which gave quotas to completely exhausted mines. There is a whole world of difference between coal, which is not only the raw material but the finished article, and this extraordinarily complex iron and steel industry.
It is far more complex than gas. In that case we had a Commission appointed by the Coalition Government, or by the Caretaker Government, when all the facts were given and all the suggestions were made. If such an inquiry had been held in this case, I am sure that we should have had the facts and that probably alternative proposals would have been put forward as to the right way to deal with this industry. [Interruption.] The hon. Member is very optimistic if he thinks that everyone would have been agreed. In the case of the Sankey Commission there were almost as many reports as there were members of that Commission. At any rate, we should have known the different alternatives then and have been in a position to judge which was the right one, and we should have been able to see whether it was necessary to introduce a Bill of this kind to hand over the steel industry to national ownership. It is suggested that when this Bill is passed there will be competition, which is why the Government are keeping the names of the firms. I have already given my answer to that.
The second contention is that the industry will be in a better position to negotiate for scrap and raw material. That is one of the things I fear more than anything else, for steel will become a question of bargaining between one Government and another, where all kinds of considerations will enter, apart from considerations of the industry itself, the

very kind of questions that lead to trouble, disputes, possible hatreds and maybe ultimately to war. On the other hand, if these matters had been left to follow their natural course, the Government of the day could then exercise true supervision. The right thing would have been to have a full inquiry first, and then for the Government to come to the House and explain what was their policy and how they proposed to work out their organisation, when all of us could have judged whether it was the method to produce steel of the proper quality, quantity and price. Because the Government have not done this, I cannot be a party to this Bill.
May I end by saying something in reply to what the right hon. Gentleman said in reference to what I and some of my colleagues wrote in 1940? The part of the memorandum he referred to was not written by me. As he is aware, it was written by a man for whom I have great respect, Dr. Balogh, the great economist, who is now helping and assisting hon. Members opposite.

Mr. Mitchison: Did the right hon. and learned Member sign the memorandum?

Mr. Davies: Certainly. What we did was to sign the preliminary part and pay acknowledgment to the learned economist who wrote the memorandum. I do not withdraw one word from that. What we were concerned with was the control over industries essential to the community. But will not the right hon. Gentleman admit this; that now that we have had very considerable experience of the effect of national ownership, problems have been disclosed which no one seemed to be aware of at the time when the question was first considered. Will he not admit that in each case, far simpler cases than this one, the problems which have been shown still remain unsolved? If so, will he proceed with this far more complex industry without any further inquiry? If he is not prepared to admit that, then he is obviously following mere ideology, but if on the other hand he dissociates himself, then he should not be introducing this Bill but coming to this House to set up an inquiry. That is my answer. I conclude by saying that the answer is a short, efficient and quick inquiry into the whole matter, so that the country may judge what is the best way to deal with this great industry.

6.26 p.m.

Mr. Horabin: Like my hon. Friend the Parliamentary Secretary to the Ministry of Supply, I feel that I should plead for the indulgence of the House. It is very nearly two years since I last spoke in this House. The effect of a crash takes some time to get over, and it also takes some time to regain one's confidence. It is for that reason that I plead for the indulgence of the House. I am going to criticise some of the things the Leader of the Liberal Party has said in his speech, but before I do so I want to pay genuine tribute to him. He and I have worked together for many years inside the Liberal Party, and before I begin to criticise him, I wish to say that the mainspring of his political life is to my certain knowledge the desire to serve the common people of this country, and that any disagreement between us is purely on the question of means and not of ends. It is perhaps unfortunate that that disagreement on means has led to my sitting on these benches today instead of sitting beside him on the Liberal benches.
I really cannot understand why my right hon. and learned Friend is not supporting the Second Reading of this Bill. Throughout the war years we worked very closely together. He was my leader in those days even before he was Leader of the Liberal Party, and he taught me quite a lot about the economics we should need to adopt when peace came. It was he who, to a very large extent, converted me to the nationalisation of steel, to the nationalisation of land and so on, but unfortunately I could not change my point of view. I fought the General Election on this issue, and so did my right hon. and learned Friend I believe—perhaps not on the nationalisation of steel, but certainly on the question of the nationalisation of the land. When he talks about that document, which was certainly written by Dr. Balogh, and says that he merely put his signature to it, I would remind him that we spent many months and a great deal of concentrated work in producing that document, of which I am very proud. One of the things we had to do was to revise the language sentence by sentence, as he will remember.

Mr. C. Davies: I accept all that. The only thing I was pointing out was that it

was a very learned document, which I could not have produced and I do not suppose my hon. Friend could have produced. I also went on to say that I accepted every word of it and did not withdraw from it, and then I went on to explain why I regard this Bill in the way that I do.

Mr. Horabin: I want to read a few sentences out of this document because it does not seem to me to require any technical knowledge to understand what we wrote. When we wrote these statements we must have fully understood what we were doing. We went into some detail and gave the perfect economic case for the nationalisation of the steel industry. Under the heading "Publicly Owned Monopolies" there is the following passage:
The second case is represented by industries where private monopoly control is exercised by an association of all or most firms in the industry, efficient or inefficient alike, with a view to maintaining prices at that level which would permit the most inefficient to survive. To attempt to break up monopolisation in these instances would result in the bankruptcy of the inefficient units and would, therefore, be strongly resisted by both employers and employees. If, indeed, the industry is strong enough, e.g., the Iron and Steel Federation, there seems little, if any, hope that an attempt to break up a monopoly would succeed, and if it succeeded would probably bring about a general crisis and bankruptcy. Transfer to public ownership in these instances is necessary to avoid such disasters to those investors who are shareholders in the more inefficient units of the industry. The State should buy them out at the current value of their investments, reorganise the industry by reducing the capitalisation, and start afresh with the monopoly good will squeezed out of the system.
That is a very clear account of the economic necessities of the situation. It provides the economic justification for the nationalisation of the steel industry. Why has the right hon. and learned Gentleman changed his views? Does he think that because the steel industry is doing well today, as it is, because managers, technicians and the like are doing their job well, that is a justification for not nationalising the industry?
Surely, if the industry had done its job during the 1930s, and had reorganised its plant and had got rid of inefficient units, it would be doing a much better job for the community than it is, in fact, doing today. We are now living in a sellers' market and under those conditions the effects of the cartel, as the


right hon. and learned Gentleman said, do not apply. But the moment we get to the buyers' market, as we shall before long, what will happen in the industry? Will not the right hon. Gentleman the Member for the City of London (Sir A. Duncan) begin to insist on high prices at home in order to protect the inefficient producers? Will he not insist on quotas? Shall we not go back to the evils of the cartel system once again?
The only thing we can do today, in this sellers' market, is to reorganise the finances of this industry in such a way that the plants which are inefficient are wiped out, written off, and finance for new plants is found. I believe that the only possible source of that finance is the community as a whole. What will happen if the reorganisation of the industry is postponed until a slump comes? Will private investors put up money then? Of course not. The Iron and Steel Federation will come to the Government and ask for Government guarantees for their private loans, and the whole racket will start all over again.
The only possible solution is for us to nationalise the industry now. Do not let us be misled on this question. I have heard Members opposite saying during the last few days that now is not the time. They have said that about every progressive Measure we have ever had. Would we have had the Beveridge social security plan if the Tory Party had been in power? Did not the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) tell us then that now was not the time? Was not that the story of the Fisher Act?

Sir John Anderson: I did not say any such thing.

Mr. Horabin: If I remember aright the right hon. Gentleman said that the Beveridge plan was premature. Does not that amount to the same thing?

Sir J. Anderson: I was a member of the Government which introduced that legislation, and passed it, and I was in favour of it, as I made clear in more than one speech.

Hon. Members: Withdraw.

Mr. Horabin: I apologise to the right hon. Gentleman if I misinterpreted him, but it was clearly in my mind that that

was the effect of what he said. However, I have no wish to misrepresent him.
I consider that the time to nationalise the industry is now. In the sellers' market of today we can squeeze the monopoly good will out of the industry if the problem is tackled in the right way. The Leader of the Liberal Party demanded an inquiry, but do we really need an inquiry? After all, the Sankey Inquiry was held in 1930, although I agree that its Report was not published, and we know the views of the Import Duty Advisory Committee throughout the 1930s. They all told the same story, that there must be huge capital reorganisation, huge capital investment, if the industry was to renew its youth. I do not pay much attention to pre-war inquiries, but has not the Federation itself given us all the facts? It has told us that there must be an investment of £200 million if the industry is to be put on its feet and modernised. We have all the facts.
The issue between us is not ideological; it is whether the Federation, or the industry, on its own, could get rid of inefficient firms, write them off, and find the new capital that is needed in the private market? Can they do this ruthlessly and efficiently, so that we have an up-to-date industry to meet the buyers' market when it comes? In our view it is not possible for the Federation to do that without guaranteed loans. In other words, the community will have to foot the bill. The right and proper thing to do is to face up to the situation, and let the community take over the industry at the fair price which shareholders are now being offered. Let the industry be reorganised with the money of the community on behalf of the community. Do not let private shareholders do what they want to do again—turn the whole thing into a racket.

6.39 p.m.

Sir John Anderson: I must begin by declaring an interest. I am a director of Vickers. I was a director before the war, before I became a Minister, and I accepted an invitation to rejoin the board after I ceased to be a Minister. Vickers is not directly affected, in respect of the greater part of its undertaking, by the provisions of this Bill, but it happens to be the owner


of half the capital of the English Steel Corporation, which is included in the Third Schedule. I hope hon. Members will believe me when I say that in what I have to put to the House I am in no way influenced by my connection with Vickers.
I must not be taken as lagging behind my right hon. and hon. Friends on this side of the House in condemnation of this Bill if by a wise division of labour—a division which is convenient for me personally—I confine my remarks almost entirely to the compensation provisions of the Measure. As will be apparent before I sit down, I take the view that the implications of the compensation provisions go far beyond the narrow question of whether A or B gets more or less than he might think reasonable. For that reason I welcome very greatly the opportunity of taking part in this Debate.
The first thing to be said about compensation is that it must be fair and in so far as compensation is not fair there must be, as my right hon. Friend the Member for Woodford (Mr. Churchill) said, an element of confiscation. I heard an hon. Gentleman opposite say in another connection the other day that he was in favour of compensation, but in his view compensation ought to be based on a level of prices many years back. I would not regard anything of that sort as fair compensation and I give the Government the credit of believing that when they talk about compensation they mean fair compensation, and that they are prepared and see their way to meet criticism on the score that the compensation they are proposing here is unfair.
The question of the appropriateness of Stock Exchange values as a measure of compensation has been much canvassed. The whole subject was dealt with in very great detail in a very powerful speech on the Second Reading of the Transport Bill by my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. W. S. Morrison). I am not going to go over the details of the argument set forth in that speech. I maintain, for reasons I hope to be able to establish, that for the present purpose Stock Exchange values are an unsound and unfair basis. I am not going to indulge in any sweeping generalisations.
In certain circumstances and particularly where rights only are concerned

Stock Exchange values may be a fair basis. For example, when the Bank of England was nationalised on a basis designed to give stockholders the same income as they had been receiving over a long term of years, I did not join with those who sought to argue that there should have been an investigation of the reserves and other resources of the Bank of England with a view to the valuation of assets. I took the view that the Bank was a public institution which had built up its resources in the public interest and in that case Stock Exchange figures gave a fair basis of compensation.
In regard to the main line railways I could see the force of the argument in favour of Stock Exchange values, though I pointed out certain anomalies that were involved by recourse to that basis. I took the view that inasmuch as railway stocks had been made a trustee security by special legislation for the specific purpose of enlarging the field of investment, there was a great deal to be said for the Stock Exchange basis of values in that case.
I want however—and this is the first point I wish to emphasise—for this purpose to make a clear distinction between a shareholding which represents mere rights and an equity shareholding which represents a share of the material assets. That is a distinction which in my opinion ought to be drawn, and incidentally it is a distinction that was drawn by the Government in the Transport Act as between the mainline railways which were taken over and the assets of the road hauliers. There a different basis of compensation was adopted. I have no doubt that that is present to the minds of hon. Members. In the case of the road hauliers, the basis was replacement value of the vehicles, written down according to age, plus valuation of other assets, plus incidentally compensation of two or five years' purchase of profit in respect of loss of business.
I wish to emphasise, as has been emphasised by other speakers, that the Stock Exchange price is not necessarily or closely related to the real value of the asset which is in question. It is something which is determined by an interplay of supply and demand among people who are concerned primarily with the prospective interest yield or possibly with the trend of share values. The Stock Exchange value reflects human weakness and


error. It is essentially subjective and not objective. It might indeed be argued that a basis of compensation related to Stock Exchange prices would be fair to that section of shareholders representing what I might call share market operators or, to use a more neutral term, mere investors. It could be said that such people have no right to more than they had paid or more than they could get in the open market. I would not accept that argument as wholly just. The conditions of a voluntary market are not reflected in the conditions of compulsory purchase. The question of compulsory purchase involves wholly different considerations, and I would go so far as to say that I can personally see no reason why the person, who, by the exercise of individual judgment, has got something cheap should have it taken away from him compulsorily only at what he has paid.
In iron and steel we are not concerned primarily in my opinion with an investor interest. We are dealing with industrial owners whose interest is very largely not in their share values but in the assets which are behind the shares. Those are the people who should have consideration, although I admit at once that probably all the shareholders of a particular category have to be treated alike. I am prepared to agree that it might be very difficult if not impossible to find a basis of discrimination between what I call an investor and what I call an industrial owner, and in saying this I have in mind the argument that was advanced in the Debate yesterday by the hon. Member for Central Southwark (Mr. Jenkins). He called attention to cases of certain persons who would receive more for their shares than they could get for them in the open market and he thought that was very wrong. Was it so very wrong? They did not want to sell their shares. If they did they could have got what was offered in the open market but they held on to their shares. They are being deprived of them.
But are we going to be told that industrial owners, who from this point of view are the most deserving class of shareholders, are to be given less than the fair value of their assets, in order that we may avoid paying to others a little more than they would otherwise get? Is that to be the argument? I hope not. I see the Chancellor of the

Duchy of Lancaster in his place. I remember very well an occasion when he himself used that sort of argument. It was when he imposed a tax on bonus shares. He said, in effect, "Some bonus shares are innocent, some are mischievous; I am going to deal with the whole problem by taxing them all alike." If the argument of the right hon. Gentleman is valid, and if we are to be told that we must fix a basis of compensation which at all costs does not give more to certain sections of shareholders than in equity they should have, we can only do that by giving other and, in my view, more deserving classes of shareholders much less than in fairness they ought to have. I say that it is a preposterous argument with which I would have nothing to do.
So far I have been advancing considerations of a general character—considerations of principle. I think it will be easy to show, and I will go on to show in a moment, how unfairly the proposals in this Bill are likely to work out in practice. That brings me to the point which has been stressed by previous speakers, and to which the Minister of Supply made reference—that the market price of shares is notoriously affected by recent dividend policy. A lavish distribution depresses the value of the asset but enhances the share valuation. The retention of profits for development has precisely the contrary effect. That, I think, cannot be gainsaid.
That argument, which would be strong enough in any case, acquires overwhelming force in the light of Government policy. The Government have exhorted industrialists not to increase their dividends. I think the right hon. Gentleman recognised that most of them had loyally carried out that policy. All did not. Those who did not brought about in the normal course of the operations of the share market an enhancement of the value of shares on which, under this Bill, compensation will be assessed. Those who loyally supported the Government depressed the value of the shares.
The right hon. Gentleman said yesterday something to the effect that that was an argument which appeared at first sight plausible. I am not quoting his exact words. Then he proceeded to examine it and he made use of an argument which I can only describe, I hope without offence,


as quite grotesque. He said that it is just like a house which is subject to rent restriction, and everyone agrees that a house which is subject to rent restriction is bought or sold at something below the price at which, free of such restriction, it would change hands. Of course; rent restriction has the same effect as, for example, the fair rents legislation which preceded compulsory purchase in Ireland. It depresses the value. But what is the value that it depresses? It is the value of the asset. Here the value which is depressed is not the value of the asset; the value of the asset is enhanced. What is depressed is the basis upon which the Government say compensation ought to be paid. I can think of no better argument which could be advanced in support of the position that I take up and for the purpose of demolishing the position which the right hon. Gentleman himself sought to establish.
My right hon. Friend the Member for North Leeds (Mr. Peake) yesterday referred to a pledge given in very specific terms, and repeated in equally specific terms by the Chancellor of the Duchy of Lancaster, I think, to the effect that industrialists in the iron and steel industry could count upon it that any expenditure on development which they might incur after a certain date in 1946—roughly two years ago—would be made good to them. How is it being made good to them? That is something which I hope the Chancellor of the Exchequer will deal with when he speaks, as I understand he will later this evening.

The Chancellor of the Duchy of Lancaster (Mr. Dalton): My right hon. and learned Friend the Chancellor of the Exchequer will deal with the whole of this question, including this point, but the right hon. Member for the Scottish Universities (Sir J. Anderson) is not quoting exactly what I said. It is recorded in yesterday's HANSARD. I did not use the phrase "made good."

Sir J. Anderson: I quite agree. He said that they would receive a corresponding advantage when it came to the calculation of compensation, or something to that effect. Anyhow it is quite enough for my purpose. His words were:
… whatever the final method and basis adopted, proper allowance will be made in assessing compensation for the results of any

expenditure incurred from now onward, on approved schemes of development or rehabilitation."—[OFFICIAL REPORT, 28th May, 1946; Vol. 423; c. 1004.]
I have no desire to misrepresent the right hon. Gentleman. I was giving him what I thought was the general effect, and I still think it is the general effect, of what has been said. I say that the basis of compensation in this Bill should be an independent valuation of assets, whether on some formula such as net average maintainable revenue, or otherwise, by an impartial authority.
It seems to me that perhaps the basis which we find in the Bill came to be chosen as that which appeared most convenient, in view of the particular method of acquisition which is proposed. I notice that the Minister of Supply in his speech yesterday said that the property acquired is securities. I deny that absolutely. The property acquired is hard assets and liquid capital of all kinds. The method proposed is by acquisition of securities; but that is not the substance, it is the form, and I am surprised that a Minister with the experience of the right hon. Gentleman should have fallen into the obvious error of confusing procedure with substance.
However, I am not concerned only with the position of shareholders, whether investors or what I call industrial owners, in the iron and steel industry; I am not only concerned with whether they get more or less than they may expect or than they or we might think right. My view is that they are going to get much less. I could illustrate that by individual cases where it is clear beyond any question that as between one concern and another, otherwise comparable, differences of dividend policy had made an enormous difference to the valuation of the shares.
If there were time—and perhaps there is time—I could give, not individual cases, but a summary which has been prepared by the Iron and Steel Federation and which, I think, brings out very clearly the truth of what I have been saying. I will give it very briefly, because I do not want to take up time unduly. That summary includes particulars about 18 firms which are scheduled for acquisition where there was a share valuation at the relevant dates specified in the Bill. The compensation that will be payable to these 18 firms works out at £172


million. The value of the assets of these firms, taken on what is called the Income Tax basis—that is to say, taking the written down value of the various assets, which means taking all assets of more than say 20 years of age as practically nil and making an estimate of retained profits, because that must be taken into account—the value on that basis as compared with the £172 million of compensation is £238 million.

Mr. John Lewis: Net?

Sir J. Anderson: Yes. The liquid assets of these firms are put at something over £100 million. Those are firms with an ingot production of 9 million tons, and a pig iron production of 6 million tons annually, and engaging in various outside activities. If the value of the liquid assets is deducted from the compensation, we get a figure of £72 million for plant and equipment capable of producing on the scale I have mentioned and the earnings of which, during the last year for which complete accounts are available, amounted to no less than £24,657,000, which is equivalent to a return of 14.3 per cent. on the compensation payable. As an ex-Chancellor of the Exchequer I like to see the Government making a good bargain, but I do most definitely deplore a resort to gangster methods.
Before I gave that illustration I was saying that I am not concerned only, or even primarily, with the compensation of individual shareholders. It is essential in public affairs that justice should be seen to be done. That is a very trite saying, but it is also a very true one. If large numbers of people are left with a rankling sense of injustice after a public operation of this kind is carried out, the consequences are bound to be very grave. On previous occasions I have ventured to emphasise, for the Chancellor of the Exchequer and his predecessor, the importance of being scrupulously fair in relation to taxation. It is absolutely essential that the public officials, who are the instrument of the Government in carrying out policy, and who are in constant touch with the public—in this case taxpayers—should be able to explain convincingly the basis on which they operate. If they feel that the basis is unfair, how can they win that collaboration and the active co-operation of the public which

is absolutely essential to effective tax collection and to the maintenance of our revenue and which we have, fortunately, enjoyed in this country up to now, almost alone among the countries of the world?
That principle which I have previously emphasised in relation to taxation has, in my judgment, a much wider application. It becomes of greater importance in proportion as Government policy cuts into the lives of the people. If the policy adopted by the Government is such as to stifle enterprise and reward slackness, if it penalises thrift and encourages extravagance, if public-spirited, conscientious, law-abiding citizens find themselves at a disadvantage compared with others not so scrupulous—and the Government have adopted from time to time policies which have had all these effects—then we shall have inevitably a lowering, and a progressive lowering, of standards of public conduct. That is an inevitable consequence and, looking round today, can we doubt that there has been such a lowering? I make no reference to quite recent disclosures or allegations, but I have been saying this kind of thing for the past two years because I have seen the evidence on all hands.

Dr. Morgan: Some of us have been saying it for 25 years.

Sir J. Anderson: Perhaps, but with less justification. I beg the Chancellor of the Exchequer to give very serious consideration to what I have just said. We cannot afford to have any more "once for all" injustices. We really cannot.
Finally, may I say this? I have always taken the view that we, the people of these islands, are a good people. We challenge comparison with any other community in the world. We have been an example to the world for centuries. I am not going to quote Pitt's declaration familiar to everyone, but in love of liberty, in respect for the law and in the standards of our public conduct, developing progressively through the centuries, I venture to say we have stood out among the nations of the world. We have gone forward as a community and as a nation on a basis of justice and truth and kindliness. I would put that most earnestly to all in this House and elsewhere who may, from time to time, be influenced by doctrines in which those basic virtues are non-existent or, at best, inconspicuous.
I beg the supporters of the Government when they talk, as they have been talking, of Tory misrule and the evils of the capitalist system, to remember that we have attained our present position as a nation—and this is an undoubted fact—and our standing in the eyes of the world in a period when Tory Governments predominated and capitalism was the foundation of our economic life. The continuance of our past progress, the maintenance of our standards under different conditions is not, I submit, something to be taken for granted. I say this not as a Tory; I am not a Conservative in politics and, in fact, I have no qualification to be regarded as a capitalist; but I say to the Government that I tremble for the future of my country when I see them rush headlong into policies alien in inspiration, at variance with our traditional way of life and devoid of any solid basis of experience. For these reasons I oppose this Bill and, in particular, I condemn the shortsighted and unjust financial proposals which it contains.

7.10 p.m.

Mr. Fred Marshall: I come from a city deeply involved in this Bill, the City of Sheffield. The only common ground between the right hon. Member for the Scottish Universities (Sir J. Anderson) and myself, is that he is interested in the English Steel Corporation, and that great firm in the City of Sheffield happens to be situated in my constituency, so I suppose the right hon. Gentleman is some kind of a constituent of mine. I represent Brightside, which, I think I can claim, is one of the greatest industrial constituencies in this country, if not the greatest. Many of the famous names to be found in the Third Schedule to this Bill are of firms situated in my Division. While I have never worked in the actual process of steel smelting, I have spent 30 years of my life in one of the firms which is to be acquired, and have had a speaking acquaintance with steel production over that period.
It has been my privilege to know many of the chief men in Sheffield's great steel industry, certainly during the last generation and a half. We should be less than just if we did not pay our tribute to the great achievements of these men. Names at once rise to one's mind—men of the

calibre of Professor Sorby, Benjamin Huntsman, Sir Robert Hadfield, Sir Henry Bessemer, Sir John Brown, Mark Firth, Dr. Hatfield and Harry Brearly. As I say, it was my privilege to know some of these men, and the records of their discoveries in steel make fascinating reading. Most of them were essentially technicians, and it was inevitable that some of them should found great firms, the names of which are with us today. Many of the great steel discoveries have been made by men with little in their pockets, and some of them have been poor. I could mention many instances. Take the case of stainless steel invented by Mr. Harry Brearly, whom I knew. Mr. Brearly was, as wealth goes, a comparatively poor man. Whether by accident, design or definite research and experiment, he discovered how to make the ingredients of stainless steel and then how to make the steel.
I can remember the first bits of this wonderful metal seeping through into the various shops. To us young people it seemed almost like a miracle and we thought that the dream of the metallurgists had at last been realised; that the corroding power of rust had at last been overcome, and that steel could be produced which could sink into the sea, if necessary, and come out practically rustless. The invention of stainless steel has saved this country many millions of pounds per year. Since it was discovered it has found its way almost every month into new avenues of usefulness. It beautifies our great liners, our public buildings, our shops, our streets, our homes and our tables, and to an incalculable degree has lightened human toil.
The same could be said of manganese, silicon steel, heat resisting steels and all the great alloys for which Sheffield is noted. In short, the stories of these great discoveries in steel are of fascinating interest and they tell of unremitting labour, research and experiment——

Mr. Brendan Bracken: —and enterprise.

Mr. Marshall: It is not too much to say that the labours of these technicians gave steel a predominant position in the economy of this country. And when the industry they have created—here I want to include that fine body of men who man


the furnaces—is passing into our hands, we should be less than just if we did not recognise the vital and notable contribution that they have made to the steel industry and to our economy generally.
The question I put to myself is: Is nationalisation necessary? I am no ideological theorist in this matter, and neither are the men who man the furnaces. An hour or two in front of a steel smelting furnace, standing up to intolerable heat, with dark glasses over one's eyes, wet through with sweat, a towel round one's neck, another in the mouth to keep out the fumes, is enough to drive all theories out of a man's brain. There can only he one test—is nationalisation necessary in the public interest? If it is, I am content. I cannot conceive of any Government embarking on this difficult matter other than in accordance with that principle. After all, the Government have an overall view of the industry, knowledge of its distribution, its capacity, and its vital relation to our national economy. To say that the relation is vital is an under-statement. Iron and steel are the basic materials of a vast range of manufactured goods, and it is true to say that, with coal, the very life-blood of the nation depends upon them.
If, after consideration of all these related facts, the Government say that nationalisation is necessary, it has my support. I am not impressed by the gloomy prophecies that the industry will sink into ruin and chaos as a result of nationalisation. Those who indulge in such foreboding do not know the industry or its men; they may know something of its finances, but they know nothing of its soul or its loyalties. Let us take the case of steel smelters. Those who have mixed with them have learned to admire and respect them. The very nature of their work creates in them a sturdy independence. In their ranks is a precious heritage of skill and craftsmanship—if you like, a mass heredity carried on from generation to generation in individual families.
Another very important point in that no body of workers in this country is less dependent upon directions from above. These men can give us all lessons in team work. It is needless to say, of course, that they are well organised and, if I may say so, well led. Those who think

that nationalisation will make these sturdy steel men into slackers, men who will not pull their weight, have certainly got to think again.
What is the attitude adopted by these men to this problem of nationalisation? I know many men in the Iron and Steel Confederation. When I say that in Sheffield only recently 21 of their branches met and reasserted their adherence to the principle of nationalisation and to the Bill, I think it will be agreed that the Confederation is definitely in favour of nationalisation as portrayed by this Measure. In case there is any doubt about this, however, let me refer to a recent very curious confirmation of the assertion I have been making. I have here a page from the "Sheffield Daily Telegraph" of Saturday, 30th October, in which reference is made, of course, to the Iron and Steel Bill, and in which are given the opinions of men from the shops. Apparently, these opinions of seven steel workers were taken promiscuously, and this journal has published their views about the Measure. Anyone who knows anything about steel and looks at these photographs will see that these men are steel smelters. I could give hon. Members their names and addresses if they ask me to do so, but I do not wish to take up the time of the House. One man says:
They have made a grand job with the coalmines. I think firms have made enormous profits that should go to the State.
Another said:
I am neutral. Let's have the best scheme, nationalised or not.
Another man said:
Why shouldn't it work with steel? I am sure it will be better for the country and for the workmen who do the job.
Another man called Jack Marshall, but no relation to me, said:
I believe in private enterprise and competition. It is the best way.
Another expressed the view:
Nationalisation will be better for all.
The next one, who had been 15 years in the works, said:
It is high time the whole country had a share in the profits.
The last man remarked:
Let them try. If it succeeds it will be all the better for everybody.
These are the voices not of fanatics, but of hard-headed steel smelters who


evidently know what they are talking about. Five are in favour of nationalisation, one is neutral and one is against it. These opinions have been culled by a Tory reporter for a Tory paper. I should imagine that those proportions apply generally over the whole steel world.
It is true that the hon. Member for Hallam (Mr. Jennings) also expressed his views in the same paper. What he said was this:
This Bill, if put into effect, will be the deathblow to the skill, ingenuity and enterprise so outstanding in this industry today.
I have a very great respect for the hon. Member for Hallam, but I think that on this occasion he was having a really wild fling. The hon. Member for Ecclesall (Mr. P. Roberts) also expressed his views in a somewhat similar style. I believe he said that, nationalisation is at last going to get its claws right into the very vitals of Sheffield. If the opinions of my two hon. Friends mean anything, nationalisation will reduce the knowledge of technicians, craftsmen will lose their skill and the industry will sink into ruin. I do not believe it. I think the industry will carry on in much the same way as it has been working. There will certainly be a change of ownership, but that will not be so obvious to the men in the various departments, and I do not anticipate that disturbance which has been prophesied from the benches opposite.
I believe that, of all nationalisation projects, the nationalisation of our iron and steel will be the most difficult. [HON. MEMBERS: "Hear, hear."] I say that quite frankly. In iron and steel we are dealing with an intricate complexity of industrial processes, most of which have grown up during the last 150 years. Probably the greatest difficulty will be how to apply the principle of nationalisation to what I will call composite firms. Inside these firms are many processes, all links in a chain of production, which I have seen in operation many thousands of times. Steel is smelted in the furnaces; it is then poured into moulds in the factories; those castings are taken into annealing—or heat treatment—shops; from there to the fettling shops—steel dressing shops—and then to the machining shops; finally, to the fitting and assembling shops—and probably further even than that, to the tool rooms. The consequence is that any attempt to

separate these processes by a nationalisation Measure will, in my estimation, create almost insoluble problems of demarcation and administration, difficulties in accountancy and divided loyalties in management. I feel sure that such a policy would result in complete chaos.
Furthermore, such a hybrid scheme could never be permanent. This apparently has been recognised by the sponsors of the Bill—the Government—because, as at present drafted, the Bill will bring within its scope all kinds of ancillary processes. Let me quote a few from my own experience and knowledge of one of these composite firms in the steel industry: moulding, forging, pressing, snipping, heat treatment, grinding, electrical welding, shaping, pickling, polishing, tool-making and engineering. All these are amongst the oldest processes of some of the firms to be nationalised, I think I am correct in saying, under the Bill. I know that this aspect of the Bill has been criticised. It has been said that the Government have no sanction for it. But the critics have never put forward an alternative. Neither can I, because I do not think there is a reasonable alternative except to bring in all these undertakings of the particular firms coming within the scope of nationalisation.
Sheffield is vitally concerned in this Bill. To prove that, one has only to turn to the Schedule and to see such names as Hadfields, Jessops, Bessemers and all those great firms, to realise that. Sheffield has been interested in steel making for centuries. I believe Chaucer in his "Canterbury Tales" refers to one of his characters as bearing a "Sheffield thwitel in his hose." I suppose that in modern language that means he had a dagger in his stocking. It is a staggering thing to realise that 90 per cent. of Sheffield's population depends upon steel production, or its auxiliaries. From that it will be seen how much we are involved. In the 1930s there were 70,000 unemployed and it was inevitable as we have such a vast population depending on steel, that when a slump came we were hit very hard. I could tell a story about the ingratitude of governments to Sheffield after wars and I sincerely hope that will never happen again.
We do not make vast quantities of bulk steel in Sheffield but make about


one million tons of high quality steel per year. It is estimated that that one million tons is equal in value to the 14 million tons of bulk steel made in the rest of the country. We are certainly very much involved. Since Benjamin Huntsman discovered the crucible process of making steel somewhere about 1740, the City of Sheffield has become the most important repository of knowledge of steel production in the country and, possibly, in the world. Many of the private firms involved have wonderfully efficient laboratories. I think it would be true to say that there has been no great development in steel during the last 100 years which has not had some connection with Sheffield.
If Sheffield is to prosper in the future three things are necessary. One is that the transfer to national ownership shall be brought about with the least possible disturbance, and I think the authors of the Bill recognise that. To the men in the shops it will be mostly a change in ownership. Secondly, we have somehow to harness to the chariot of nationalisation the knowledge of the technicians, and I see no reason why that cannot be done. Thirdly, we have to retain, develop and nurture the skill of the craftsmen who man the furnaces. Those are assets to any Minister taking over the steel industry. The craftsmanship of the steel worker is very definite. It was referred to by Sir Patrick Abercrombie as mass heredity and I think it arose from the customs, experience and workshop practice of 150 years. It was transferred from father to son in unbroken sequence through generations. It expressed itself in skill, craftsmanship and reliability.
These are precious assets, and I hope the Minister appreciates their significance. I know that the Parliamentary Secretary does. Education, research, experiment, invention and skill are the very lifeblood of the steel industry. There are already many fine institutions where the science of metallurgy is taught, including the University of Sheffield, which has had many distinguished teachers and students. It is in these places and to these bodies that nationalisation must prove that it can maintain the high standards already achieved, and improve on them. Steel making is very ancient, but the science of metallurgy is very young. It has

already marvellous achievements to its credit, but there is still a vast field to explore. That great task and responsibility will now pass to the nation. The technicians are there, the craft and skill and workmen are there. If nationalisation can by vision and understanding utilise these great talents, it will go forward to success.

7.37 p.m.

Mr. Martin Lindsay: I begin by saying how moved I was by the powerful speech of the right hon. Member for the Scottish Universities (Sir J. Anderson) and how inadequate I consider are the Government's compensation measures. I am sorry the Chancellor of the Duchy has left the Chamber as, of course, we can detect his hand in the compensation proposals. In him there is, I believe, more envy, hatred and malice than in any other man in public life today. But we have always regarded the Chancellor of the Exchequer as standing in a different category. Of the Chancellor, whether we have agreed with his views or not, we have always said that we admired his integrity; but if he is going to continue to sponsor what we can only regard as a monstrous breach of faith, we shall be bound to revise that opinion.
This is not a question of compensation for a few rich men, but for many humble middle class folk who are already feeling the pinch and not least as a result of the Government's previous compensation of stockholders of nationalised industries. Take the shareholders of two big companies, Dorman Long's and Guest, Keen and Nettlefold. The number of ordinary shareholdings of these two companies is over 70,000 and the average amount of ordinary shareholdings in Dorman Long's, for example, is under £200.
I must leave the question of compensation because it has already been adequately dealt with. I wish to make a few general observations and to say how much I enjoyed the speech, as I always do, of the Joint Parliamentary Secretary. I hope I shall put him "on the spot" very shortly about one or two of his remarks. In my opinion this is a very sad day for Britain because the Government and their supporters are recklessly determined to nationalise the steel industry, not for economic, but for political reasons. The Government are


bringing in this Bill as a naked and unashamed grab for power. That is the true purpose of this Bill, to "break the back" of the economic forces of this country as the hon. Member for Broxtowe (Mr. Cocks) has said—those forces which have so greatly enriched this nation in the past and without which our national standard of living would be very different today.
It is part of the Government's case to say that the leaders of the steel industry have too much power. To press this point when it suits them, they omit all mention of the Iron and Steel Board, which has supervised the industry in a manner with which any reasonable Government would have been content, and would have left alone, thereby giving the nation the best of both worlds—of private enterprise and Government control. Now, the leadership of this great and famous industry is to pass from the business man and industrialist to the politician, and the Minister is to have a blank cheque to do anything that he thinks fit by arbitrary act of power. Yet there is nothing in this Government's record in respect of the industries already nationalised, and nothing in the Bill, to suggest that they know how to use their power better than those industrialists who have already brought the industry to its present high level of efficiency.
I come to the speech of the Joint Parliamentary Secretary. He talked about the "steel barons" and the power which they had used against those who work in the industry. I tell him plainly that there is nothing whatever in the political record of the Labour Party in the past in relation to the steel industry of which they can be proud. On the contrary, there is much of which they should be ashamed. It certainly does not lie in the mouths of any hon. Members opposite to blame either the steelmakers or my party for the sad record of unemployment in the steel industry.
My mind goes back to the iron and steel town of Scunthorpe in the years 1929 to 1931, when there was a Labour Government. We had a visit from Mr. William Graham, a well-respected member of the party opposite, who was at that time President of the Board of Trade. He came to Scunthorpe and

spoke to the iron and steel people. He said "You are asking for the tariff. I shall advise the Government that you should not have it." If Mr. William Graham had not made that error of judgment, and had given different advice, the tariff might possibly have come two years earlier, and the sad story of 40 per cent. unemployment in the industry would not have occurred.
I ask the House what reason have we to think—I say this with respect—that either the Mr. Strauss or the Mr. Jones of 1950 will be any wiser than the Mr. William Graham of 1931? It is a matter of history that the one single factor which more than any other has led to the recovery of the steel industry was the tariff of 1932—and the whole of the Labour Party voted against it. That is the record of the party opposite in connection with the steel industry, and they have no right whatever to speak in the way they do about unemployment in the steel industry. The responsibility is theirs.
What can we expect in a nationalised steel industry? There is no doubt in my mind that major decisions of policy will no longer be taken solely on economic grounds, but for political and social reasons. In support of this statement, I quote the Chancellor of the Duchy of Lancaster himself. He told us in the 1946 Debate of the scorn with which he had treated the industry's own proposals to set up new plants in what he was pleased to call "some green fields in Lincolnshire or Northampton," that is, geographically the most suitable places in view of the location of the coal and iron ore deposits. But no—South Wales was what he called "the proper place for tinplate plants." So much for the economics of plant location under Daltonian planning.
Heaven help the industry and heaven help this country when Socialist theories so predominate, as they unquestionably will do when the industry has been nationalised. Nationalisation will not solve the old problems but rather will bring new ones. I have no doubt that for two or three years there is bound to be an atmosphere of uncertainty and confusion. What did the right hon. Gentleman himself tell us yesterday? He said that nothing was more unsettling and damaging to an industry than suspense. What else will there be from


now until the Confederation has been working for at least several years? Of course, for a time there will be a putting off of decisions, and an effective standstill of new development—and this in a period when more than any other we should be going ahead to make what progress we can before American and German competition becomes effective.
And when nationalisation has taken place, what can we expect but throughout management a desire for a quiet life, and the inevitable temptation to higher costs of a non-profit making public enterprise subject to political pressure. Yesterday afternoon, the right hon. Gentleman was -very frank about what the new Corporation would do. It would appoint new men to the boards of these companies, he said. We know quite well what that means. It will inevitably mean the failed politicians like Sir Ben Smith, now a Coal Board Regional Controller—[Interruption.]—oh yes, it will.

Mr. J. Jones: The Minister's statement yesterday made it very clear and definite that the men best suited and qualified would be selected for those positions, and he hoped that they would be men selected from within the industry itself.

Mr. Lindsay: The man "best suited" will be the man best suited in the opinion of the Minister. I do not doubt for a moment that the Prime Minister thought that the ex-Minister of Food was the man best suited to run the coal industry in the West Midlands, but he is not necessarily the man most suited for the job. I expect that we shall have young men from the London School of Economics on the boards of these concerns. I do not doubt that we shall certainly have very pressing claims for representation from the trade unions in respect of honourable and patriotic men, with great gifts, I do not doubt, but not necessarily in the running of the these great companies, in which the way to the top, I think hon. Members will admit, has usually been open to the most capable, however humble their start may have been. I happen to know the managing directors of seven steel companies. Five of them started from the bottom, in the most humble circumstances. Such examples are not confined to selections from my own knowledge; they are representative.
Even more do I fear—I know that this will interest the senior Member for Bolton (Mr. J. Jones)—the effects of nationalisation upon the present exemplary labour relations. During the Recess, I renewed my acquaintance with the steel industry. I emphasise "renewed my acquaintance" because although he displayed, as usual, great charm when he was speaking, the hon. Member sneered at us who went to visit the steel industry during the Recess. I may say that no Labour Members did so.

Mr. J. Jones: I repudiate the suggestion that I sneered; I did not do so. I said that Members went to try to learn all about the industry in a few weeks during the Recess, and that it would have been a splendid thing if those same Members, or those who held equivalent positions in their party, had gone there when the men in the industry needed them.

Mr. Lindsay: If the hon. Member says he did not sneer, of course I accept that. But why should he assume that we went to learn all about the industry in a few weeks? I personally was in Scunthorpe for three years before the war. I have been to visit the steel industry since the war, and in the Recess I went again, because I wanted to see the men on the spot, and ask them what they thought about the prospects of nationalisation, in order that I could come back and tell the House. Amongst those whom I saw were the most junior managers on the plant, the men in closest contact with the actual workmen. One of the things told me was that they were anxious how to keep discipline after nationalisation.

Mr. J. Jones: Mr. J. Jones indicated dissent.

Mr. Lindsay: Oh, yes, they did. It is no use the hon. Member shaking his head. They said, "It is difficult enough now"—and I think the hon. Member will agree that in the foundries, for example, there are very serious difficulties—"but what is going to happen when the men walk round and say, 'Of course, we own the works'?" With regard to what the hon. Member said about the steel workers being so anxious to have nationalisation, of course there are a great number who want nationalisation. It would be a remarkable thing if that were not so, in view of the political propaganda which has been going on in the steel works, the agitation for this nationalisation, and


for which there is no counterpart coming from the management or the steel owners. I would say that probably something like 60 per cent.—and if the hon. Member likes to say it is a bit more I will agree—of the workers in the steel industry are anxious for nationalisation. But I am equally certain that at least 20 or 30 per cent. are very unhappy, as they told me, about what would happen to the industry if nationalisation comes. They said, "Look at the coal industry."
Amongst those who are most vociferous that they want nationalisation are the lowest-paid workers, the least skilful and the labourers, and members of the A.E.U. who are dissatisfied with their 5s. award. The first thing that will follow nationalisation will be that the Corporation will be greeted with widespread demands for wage increases from the lowest-paid people in the industry who think they will get something out of it if they are nationalised. Is that going to help us to get good cheap steel which the right hon. Gentleman mentioned yesterday? Will that assist the mutual respect between management and workers which he was so pleased to note? On the contrary, I am very much afraid that the first result of nationalisation will inevitably be unrest and perhaps the first serious trouble for 50 years.
I have said that nationalisation will not solve existing problems. What is required today is a long-term policy both for prices and investments. There is, of course, nothing in the Bill about that. What about the wisdom, or otherwise, of supporting steel production at high cost? What is to be the future in that respect? How much will costs be reduced or how much will they rise under nationalisation? How are we to get more better and cheaper steel and keep a contented labour force? There is nothing whatever to suggest that this gigantic public monopoly will solve those problems, no indication at all. But I suppose one should not expect that with a decision taken, not on facts, but merely as an act of faith.
I say that this Bill is a reckless stroke. To do hon. Members justice I believe that they are well aware of the risks that they are running. Therefore I say they must try to understand us when they see the bitterness with which we on this side of the House regard this Measure. It is

a tradition of this House that we do not let political differences interfere with personal friendship, but I am bound to say that I shall find it very hard to follow that tradition for at least some time. I personally cannot regard hon. Members who wilfully jeopardise the safety of the nation and know perfectly well that they are doing so, merely as politicians who happen to hold a different view. I regard right hon. Gentlemen and hon. Members opposite as gamblers with the best interests of the nation and unworthy of the high position of trust which they hold.

7.55 p.m.

Mr. Fairhurst: I always listen with interest and respect to hon. Members of this House, especially those who have practical and intimate knowledge of the subject before the House, as have the hon. Member for Stockport (Sir A. Gridley), who spoke yesterday, and my hon. Friends the Member for Wednesbury (Mr. S. N. Evans) and East Swansea (Mr. Mort). I thought that the speech of my hon. Friend the Member for Wednesbury would not be answered by anyone on the opposite side of the House, because from him we had a speech by one who is experienced and who knows intimately the position of the steel industry.
The Leader of the Opposition once again addressed us with that magnetism and force that one always discerns in him and which is challenging in its way. While he was speaking, my mind went back 40 years and I remembered when that same right hon. Gentleman was carrying the flaming torch of Liberal idealism and tearing the Tories to pieces, as only he can do. Today he leads the Opposition and sits on the Opposition Front Bench. I think he requires to have a tough skin. It is a saying in the North that, "Eaten bread is soon forgotten," and hon. Members sitting behind the right hon. Gentleman must have that philosophy. Otherwise they could never tolerate seeing that same right hon. Gentleman sitting before them and leading them. He and the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) have one thing in common. They both extol the capitalist system of society. Today they have put before us the virtues of this wonderful system that we have had to experience


for 150 years, and my mind flashed back to some of the things that I have seen and experienced.
I ask the right hon. Gentleman whether he has ever been really hungry for one day. Has he ever been really hungry for a week, a month, six months? Has he ever seen his wife dressed in such a fashion that she must have felt the demoralising influence which unemployment brings; has he ever felt that his kiddies could not have what he would like to give them? Have any hon. Members opposite ever experienced the feeling that comes to a man of dignity and respectable independence when he finds himself in the position that he cannot give to those who are better and dearer to him than anything else what he would like to give them? Such a thing has happened in this country in the last 40 years to hundreds and thousands of families. I have seen unemployed men in queues 200 yards long. I have been in them. I have seen experienced men who wanted to do the right thing and live respectably, hiding their faces in unemployed queues. They were ashamed that they could not earn their bread under the system which operated before the war. Hon. Members opposite seem to think that that can be forgotten by us on this side of the House.
Socialism—the socialisation of means of production, distribution and exchange—is not new. It is a system which has been fought out, and is operating in many parts of the world today.

Mr. P. Roberts: To go back to 1931 when 40 per cent. of the workers were unemployed, can the hon. Gentleman say how nationalisation of steel, when there is a dropping off in demand, would affect a position like that?

Mr. Fairhurst: I must try to make my speech in my own way. My time is rather limited. My point is that this idea is being thought out not only in this country but all over the world. Over three-quarters of a century ago, people with vision looking upon society as a whole, seeing the misery and squalor caused by a selfish way of living, and observing the tyranny and savagery of a system of which we are now beginning to see the end, preached as their method of salvation, State and public ownership of the means of production, distribution

and exchange. They felt that the system under which they lived must be altered. They said that capitalism was a vicious thing and thought in the long run it would eat up its own adherents and become a giant monopoly with absolute power over governments and peoples if it was not destroyed or its strength torn from it. That was said three-quarters of a century ago.
In essence, the vision was true, but in fact the rise of the labouring classes—their industrial organisation and political development—supported by a firm strata of intelligent politically-minded people of the middle and upper classes, did exactly what had to be done to prevent this country becoming a servile State. They held up, resisted, and are now in the process of breaking, the power of the capitalist classes. In other countries the same action is taking place; but it is taking place in another way. In many countries it is being fought bloodily with cruel methods. Here we are trying to reform the country without these difficult processes.
In the last analysis we must aim at answering the question, "How shall people order their lives as units in the social family?" There can be no standing still. Neither life nor society can stand still. Change is the very essence of all life. We Socialists say that if a state of human brotherhood is to be fashioned with a policy of individual and social decency, and with man's individual rights safeguarded within its framework, all the main and vital physical factors of such a society must be owned by the State in the interests of the people. Never again must one individual or group of individuals be allowed to control and operate vast physical factors for selfish ends.
In spite of the gloomy forebodings and pessimistic utterings of the Leader of the Opposition, I am convinced that today this country is a better place than ever before for the great mass of the people. It will be better still when the results of what we have attempted in the last three years become manifest. So far we have nationalised industries and factors which are in a social service group. The Bank of England, transport, coal, electricity, gas, health insurance, education and, from a municipal point of


view, water and sewage—all these, at one time or another, have been controlled by private enterprise in the interest of profit. Now they are nationalised. I ask hon. Members opposite, if they are returned to power in 1950, which they will denationalise. Are they prepared to de-nationalise any of them?

Mr. Erroll: Our de-nationalisation programme is clearly stated in our Industrial Charter which the hon. Member might care to read.

Mr. Fairhurst: The old Tory ideas of 40 years ago are gone and they will never return. I suggest that if the Tories were returned to power in 1950 they would not interfere with any of the services I have mentioned. The Government now propose to do something different. They propose to nationalise a manufacturing industry—steel. They propose to do it by buying up all the shares held in companies engaged extensively in iron-ore working, the production of pig iron, ingot steel and the hot rolling of steel. When the President of the Iron and Steel Federation recently made a criticism and said that we were proposing to take over only 107 firms out of over 2,000, he was misleading the public. He knew that the strength of the 107 firms far outweighed that of those which are not to be nationalised. Also, when he implied that the industry had always been prepared for further constructive development and public co-operation, he forgot that the industry's past is not altogether a closed book.
The implication that he was willing to accept some kind of Government interest is not confined to him. The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) mentioned the same thing yesterday, and so did the Leader of the Opposition. Both concede the principle that there must be a measure of Government control. If the principle is conceded that there must be a measure of Government control, how far is it to go and where does it stop? These things have to be decided, but I suggest again that they themselves do not even know how far to go. They say that it is a good thing that the Government have a right to impose conditions on the steel industry, and that they should have the right to take it over if the conditions warrant it, as was indicated by the right hon. Mem-

ber for Woodford when he said that the Government had clamped down on many industries for the period of the war. In other words, they applied a policy of Socialism in the hour of the country's agony, when everything demanded that these things should come under State control in the interests of the country itself.
When we turn to the story of what happened to our people in the past, we cannot divorce what happened to them in past years from the system which is so exalted by hon. Members opposite. While we respect their opinions and their feeling that their policy is right, we say that, as far as we and the people of the country are concerned, these things must be altered. The solution which we offer to this problem is that of giving to our people the right to live decent lives and the right to live as hon. Gentlemen opposite claim to live. We say to do that we must bring under State ownership and public control the basic factors of our physical lives—coal, iron and steel, electricity and all the factors of power. Even when we have taken these industries and placed them under public control, private enterprise will still have a pretty large field for its activities.
I well understand the anxiety of hon. Members opposite in not knowing where this Government will end in its efforts to nationalise industries which are now controlled by private enterprise. That is a matter which it can decide for itself, but one thing must be certain, and that is that never again can we allow the people we represent to toil under a system of society which allows the things which have happened in the last 50 years. Today, we say that the great mass of our people are not only politically intelligent, but are claiming the right to live their lives decently.
Today, they are going to do it, one way or the other. The question whether it will be a rough or smooth way is one which we here can decide, but those people who resist, who cling tenaciously to outworn theories and say that these things must not be, will be looked upon by us as the enemies of the rising masses today. We shall do our best to convince the people once again, when the time comes, that the policy we have tried to pursue has been the right policy, and I am quite satisfied that, when they have


heard what we have done and when they understand the implications of our policy, they will, in 1950, give us that confidence which they gave us in 1945.

8.14 p.m.

Mr. Jennings: As one of the Members for the great steel city of Sheffield, I should like to say a few words on this Bill. I respect very much the views expressed by the hon. Member for Brightside (Mr. F. Marshall) in the very reasoned speech which he made this afternoon. The hon. Gentleman did not base his case for nationalisation on the same limb as that on which almost every other hon. Member opposite based his case—that is to say, that the case is the same with this Bill as with the nationalisation of the coal industry. That case was based upon the bad old days of the past. I am sure that we want something more than that to support a Bill for the nationalisation of iron and steel. We want something more fundamental and solid than the sad story of the bad old days. Up and down the country and in this House, speech after speech has been made by hon. Gentlemen opposite against the whole background of the 1930s and the years before then when we suffered certain discomforts and unemployment.
That is not sufficient today, and I thought the Parliamentary Secretary today committed one of the worst errors of this kind, without giving any real support for the Bill at all. The hon. Gentleman gave us no proof or any sound reason at all, but merely quoted the history of the steel industry over a period of years, and, in fact, spoke almost as the Solomon in the iron and steel industry. The right hon. Member for the City of London (Sir A. Duncan) is an expert on this industry, but he would be the last in the world to claim such knowledge as the Parliamentary Secretary did, and it struck me that, during the hon. Gentleman's whole career, wherever he had been, everything was wrong but himself. He gave us some startling stories about his experiences, but I must say that, whatever may have been his experiences during his career in the steel industry, they are no sort of foundation for nationalising the industry today.
The hon. Member for Brightside, whose views I respect as honest, made what I think was the most reasonable speech from the other side of the House which

has been made so far. If there is one thing on which I would criticise him, it would be that he finished up by saying, "I cannot say whether the nationalisation of iron and steel is the right thing or not. I do not know, but, if the Government themselves think so, that is good enough for me." That is a poor way to tackle the nationalisation of iron and steel. I say definitely as a Member for the City of Sheffield with its great steel industry, that I am satisfied in my own mind that the nationalisation of iron and steel is a bad thing, and that is why I am going into the Lobby against it.
In this Debate we seem to have had a battle between economics and politics, and I say without hesitation that the times are too serious for that sort of thing, considering the economic repercussions, or the possibilities of starvation. I say with great seriousness that the iron and steel industry, by way of its exports, pays for nearly 60 per cent. of the food that is brought into this country. The hon. Member for Brightside said it produced one million tons of the 15 million tons of exports, but the value of that million tons in dollars is as much as that of the other 14 million tons put together. We have only to look at the science and research, at the enterprise, skill and ingenuity which have been put into this great steel industry in Sheffield.
This is what I might call a "squinteyed" Bill. The Government have been lifting their hats to the Left wing in the party and, at the same time, trying to salute the Right wing, and have gone squint-eyed in the process. The result is that they have had to put into the Bill that the Minister will give directions in this and that way. In my opinion, as a humble back-bencher, there is only one acid test in this situation. We must ask ourselves whether the nationalisation of this basic industry will give us better, cheaper, and more steel. I defy the Government to prove that it will, and if they cannot prove it, I maintain that they have no right to bring forward this Measure.
Will the nationalisation of this basic industry reduce the figures of unemployment so sadly put forward by an hon. Member opposite? Is there any more guarantee of permanent employment with a nationalised industry than with private enterprise? Certainly not; it is sheer


humbug and nonsense to suggest that there is. I was unable to be present in the House yesterday because I was in Sheffield where the Parliamentary Secretary was a fortnight ago. The fact that I was there last night enables me to say that my information is a little more up-to-date than his. I want to assure him and the hon. Member for Brigg (Mr. E. L. Mallalieu), who suggested that the ill will in the industry was sufficient to blow it sky-high, that there is no ill-will at all in the industry today, and that all engaged in it are pulling together.
Yesterday I had the privilege, in company with hon. Members on this side of the House and opposite of witnessing the Pageant of Production in Sheffield. Three hundred people engaged in the industry demonstrated a great variety of processes. We saw the co-operation which is taking place between the trades councils, the city council and the industrialists in an effort to push forward the city's production. In my opinion, there is no justification for a Bill of this nature. It is an absolute gamble as to what the result will be, and, judged by what has happened in the industries so far nationalised—coal in particular—this Bill will be a failure before it is put on the Statute Book.
What is going to happen in the electricity industry? In order to make it pay, the consumers are to be "soaked." The export side of the steel industry is a most important one. In days gone by, foreign competition brought out all the ingenuity, enterprise and skill of those employed in it. Today, Sheffield is known throughout the world for its production of the finest alloy steel. There is nothing to touch it. It is the most valuable in the world. Are we going to play fast and loose with this basic industry in Sheffield? On the North-East coast there is that big undertaking, the Consett Iron and Steel Company. I remember, in the "bad old days" about which hon. Members opposite talk so much, the shareholders in that great company cutting their shareholdings down from £1 to 5s. per share. Every section in that great industry lost money, so it will be seen that the hardship was not only on one side.
I feel that price and quality are going to be the test. Under this Bill, 107 companies are to be nationalised, and 2,000 more are to work under licence. Think of the chaos, of the scramble and rush

for supplies of raw materials by the people not taken over. We shall get to a position where raw materials are supplied on political grounds and where there are all sorts of corruption. There have already been a large number of "jobs for the boys" under other nationalisation schemes, and here will be a further opportunity to fix up a few more. I am pleased to say that the Bill is not what it was going to be, because, as I pointed out, the Government have gone a bit squint-eyed in trying to please both the Left wing and the Right wing of their party.
There is the further prediction which my right hon. Friend the Member for Woodford (Mr. Churchill) made this afternoon. The taking over date in the Bill is stated to be May, 1950. That date has been chosen because the Cabinet are afraid to put this Bill into effect unless they go to the country beforehand. It is a "fear" Bill and one which is badly drafted. It is going to give power to a Minister which should never be given. It is a Bill designed to pacify both the Left wing and the Right wing of the party opposite. Therefore, the Government will go to the country and say, "We have put it on the Statute Book; please send us back to put it into effect." I feel certain that Sheffield will do its best to stop the Government coming back into power at the next General Election.

8.28 p.m.

Mr. Harrison: I am quite sure it is not within the bounds of comprehension of any hon. Member to conceive the state of the iron and steel industry what would have to be before we would obtain any support for its nationalisation from the hon. Member for Hallam (Mr. Jennings) and his hon. Friends opposite. I cannot imagine any conceivable state into which the iron and steel industry might fall, that would encourage the slightest support for a Bill of this sort from the hon. Member and his hon. Friends, because we know full well that their opinions on these matters are based on ideological grounds. I am certain that the hon. Member for Hallam would oppose any change in the present structure of the iron and steel industry.

Mr. Jennings: I did not say that.

Mr. Harrison: I did not suggest that the hon. Member did. I am merely putting


that forward as the impression we have gathered from the many discussions we have had of a similar character to this. In no circumstances, irrespective of the state of the industry, could I imagine the hon. Member for Hallam and his hon. Friends supporting any reorganisation of the industry.
It has been my lot for most of my life to live under the glare of a blast furnace and to have close association with the blast furnace men. I can say without fear of contradiction that everyone who lives in a steel-producing area, other than a small section of the people, will welcome this Bill wholeheartedly. I am convinced that if we restricted our inquiries to the higher officials and the management, as the hon. Member for Solihull (Mr. M. Lindsay) must have done, we should probably get qualified support for the Bill. But if we asked the workers in the industry, no matter in what part of the country, we should find the vast majority of them fully and enthusiastically in support of the Measure.
My intimate association has been with the Stanton Iron Works which is just outside the City of Nottingham, a unit of the firm of Stewart and Lloyds. I admit straightaway that there has been some improvement in the conditions in that plant in recent years. There has been some improvement both in the modernisation of the equipment and in the working conditions. But what we in that district feel is that to maintain and continue that improvement there is only one course to pursue. Although, according to the hon. Member for Hallam, we should not refer to the bad old days, I must say that throughout the bad old days we were taught that the future of the industry must follow a completely different course from that which it followed in days gone by. We must have something new, some new set-up to preserve and maintain—quite apart from improving—the present conditions in that industry. I am convinced that I am speaking for the large proportion of our people in that district, where iron and steel is produced in some quantity, when I say that we all welcome the terms of this Bill.

Mr. P. Roberts: Mr. P. Roberts rose——

Mr. Harrison: I am allowed only four minutes, so perhaps the hon. Gentleman

will forgive me if I do not give way. At the beginning of this Debate yesterday, the right hon. Member for Aldershot (Mr. Lyttelton) completely destroyed the Opposition case against this Bill when he said that we could depend upon the present price control and subsidies to keep the industry on the right track in future. When he said that we must have Government supervision over the industry, I felt that with that statement alone, he had given the Government their case for this Bill.

8.33 p.m.

Mr. Selwyn Lloyd: I think those of us who have listened to this Debate during the past two days have been rather struck by the difference in tempo each day. Yesterday the Minister presented a very smooth facade, and apart from occasional outbursts—one, for example, by the hon. Member for Barrow-in-Furness (Mr. Monslow)—on the whole the proceedings were extremely quiet. Today, we started with a speech of a very different order from the Government. The Joint Parliamentary Secretary began by asking for courtesy, but he seemed to me to extend very little courtesy either to individuals or to the ideas of his opponents. I hope he will not think I am being unduly offensive when I say that I have heard a great deal about the hon. Member, and I have always been told that he was a better talker than a worker.

Mr. J. Jones: I shall be prepared to produce from records of production of steel—when an employer kept me in employ for 32 years in times of depression, when there were plenty of men looking for my job—analyses which will compare with any analyses in production anywhere else in the world.

Mr. Selwyn Lloyd: If the hon. Member is in a position to do that, then some of the things which he said about the bad old days came with singularly ill grace. I understand I am the last speaker to be called on this side of the House this evening and I wish to sum up the state of the argument as it seems to me at the present time. The hon. Member for East Nottingham (Mr. Harrison), and the hon. Member for Oldham (Mr. Fairhurst) based the whole of their arguments upon the bad old days. I want to make two comments on that argument. First of all, no attempt whatever has been made to


refute what was said yesterday by my right hon. Friend the Member for Aldershot (Mr. Lyttelton). No attempt has been made to deny the effect of world competition in the late 20's and the early 30's. No attempt has been made to deny the effect of unrestricted imports or of dumping by foreign countries, particularly by those like Germany who, under uncontrolled inflation, had their capital debt wiped out.
We admit those consequences of the then world situation, but it is rather odd that, when the world situation is always an alibi for everything this Government fails to do, world conditions in the past are never mentioned from the other side of the House. I quite agree that in those circumstances there was unemployment. Incidentally, the profits of the industry from 1927 to 1933 averaged 1.6 per cent. per annum of the capital employed. We also agree that during that period there was very little development. On the other hand, there has been no acknowledgement on the other side of the House of the development which took place after 1932. I suggest that possibly one reason for that is that they took extraordinarily few steps to secure any improvement in the situation when they were in office from 1929 to 1931.
We know that after the tariff was introduced there was a marked improvement; there was the growth of a unified and integrated industry under public supervision which was a substantial achievement. As a consequence of that new system, a sum of £50 million was spent on modernisation in the years before the war, and that, at present values, would be something approaching £150 million. There was increased production. In 1931 it was 5,200,000 ingot tons; in 1938, 10,398,000; in 1939, 13,200,000.
The Joint Parliamentary Secretary spoke of unemployment. It is true that in 1931 unemployment in the industry was 42 per cent., as compared with 21 per cent. for all industry in the country. It is true, as he said, that in 1938 it was 20 per cent. in the iron and steel industry compared with 11 per cent. for the rest of the country. But the hon. Gentleman did not give the figures for 1939, when unemployment in the industry was 8.5 per cent., as compared with 7.7 per cent. for the rest of the country. Nor has any

attempt been made to deny that by 1939 our prices were competitive. I submit that is a substantial record of achievement in an industry which was in such a condition about 1929 to 1931.
There have been occasional references during the Debate to specific cases. I am not quite sure whether Ebbw Vale has been mentioned. I think there has been reference to it, and it is a matter which received a great deal of attention in Labour Party pamphlets. I would simply suggest to hon. Members that they should note the difference between the first and second edition of Professor Cole's pamphlet on the subject of coal nationalisation. In the second edition of the pamphlet many of the allegations made in the first were withdrawn.
The other matter to which reference has been made is the case of Jarrow. With regard to Jarrow, I think I heard one hon. Member shout out, "The murder of a town." I think it is just as well to remember the findings of the Import Duties Advisory Committee with regard to that matter. I do not know whether hon. Members opposite suggest that that Committee was the tool of the steel-masters, but I think it is worth reminding the House who were the members of the Import Duties Advisory Committee. There was Lord May. I suppose that as he had been a servant of the Prudential Assurance Company for many years, he might, so far as the other side of the House is concerned, be suspect. But then there was Sir Sidney Chapman, a professor of economics, which fact would, I should have thought, have been a great recommendation in the view of hon. Members opposite. In addition he had been Permanent Secretary to the Board of Trade and Economic Adviser to the Government. Then there was Sir Alfred Hurst, another very distinguished civil servant; and then there were Sir Allan Powell and Sir Percy Ashley, also men who spent a great many years in the public service.
So any suggestion that the report of that Committee that referred to Jarrow was given in the interests of, or from prejudice in favour of, the steelmasters, does not have regard to the personalities of the members of the Committee. Their findings, after hearing the evidence with regard to Jarrow, were to the effect that much of the adverse criticism directed against the organised iron and steel in-


dustry was due to a misunderstanding of the position, and was largely unfounded. Therefore, for these reasons I suggest to the House that the case based on the past is just not made out. But, I was not, in fact, desirous of spending very much time in dealing with the past. It was the speech of the hon. Member for Oldham and the speech of the hon. Member for East Nottingham that provoked me to say what I have said.
It is much more relevant to this Debate to consider what are the allegations made against the industry at the present time to warrant the nationalisation of the industry. First, the suggestion is made that it is a monopoly, and that it should be nationalised because a public monopoly is very much safer than a private monopoly. In fact, the industry is not a monopoly in the ordinary sense of the term, because ever since the setting up of the Import Duties Advisory Committee the industry has not had the power to fix its own prices without reference to higher authority. In the ordinarily accepted use of the term "monopoly," I suggest a monopolist situation could not have arisen. This industry has not had the right to fix its prices, and within it there has been freedom for the individual units to compete.
I do not know whether hon. Members opposite study the columns of the "Financial Times." I somehow suspect they do not give them the attention which they deserve. If they do, they would have seen there the other day a very remarkable table of the differences in steel production among various units in the steel industry between 1938 and 1948—differences in production varying between decreases of 9 per cent. and increases of 70 per cent. or 80 per cent., showing that there has been within the industry this freedom to compete, freedom within the prices fixed to give good service, make good profits, and expand production. So, in my submission, the monopoly argument does not apply, because the industry at present is not a monopoly in the ordinary sense of the term.
The second charge made against the industry is that the plant in it is antiquated, and that as much as 30 per cent. of it needs scrapping. In the development plan submitted by the industry, it

is quite true that it is suggested that 30 per cent. of the existing plant should be scrapped; but the report is contemplating the year 1953. By 1953 it will be necessary to scrap 30 per cent. When we consider the time lag there has been owing to the war, we know that by then there will have been a period of 14 years during which 30 per cent. of the plant in the industry will have become worthy of scrapping. That, I suggest, is not at all an abnormal situation. There is also the point that, in view of the length of time involved, and the nature of the machinery, some of it may become obsolescent before it has been finally installed. It is the same problem that we had with tanks during the war, that as soon as one was being produced in quantity, it had in fact become obsolescent. Where we have equipment costing so much and taking so long to instal, it does in fact mean that within a comparatively short period of time much of the plant is bound to be obsolescent.
The next criticism against the industry is that the development plan is wrong. I hope that the right hon. and learned Gentleman who is to follow me will indicate where the development plan is wrong, and what steps the Government have taken to attempt to make it right. A great deal of criticism is put forward by Socialists, of course, on the ground of the target set up for the industry in the development plan. It would be interesting to know whether the right hon. and learned Gentleman agrees with that criticism, and whether he considers that the proper target for the industry at the present time is 20 million tons.
If so, it would be interesting if he would tell the House where he is going to get the 8 million tons of coal, 2½ million tons of ore and 2½ million tons of scrap required in addition to the present requirements to bring up the overall figure of 18 million tons to 20 million tons, and whether it is proposed to provide out of the capital equipment programme the £250 million or so necessary to give that additional productive capacity. It would be interesting also if he would make quite clear to the House the point which was made earlier by the right hon. and learned Member for Montgomery (Mr. C. Davies) as to


whether it is the intention of the Government to push up the productive capacity of the industry to the peak demand. If that is the intention of the Government, it is obvious there is bound to be unemployment in the industry when the demand falls off, and the surplus capacity available is bound to perpetuate a high cost of production.
The next argument came from the hon. Member for North Cornwall (Mr. Horabin) who said that the industry could not finance the development plan. That argument has been so torn to shreds already that it is not necessary for me to deal with it. The next argument was made by the hon. Member for Wednesbury (Mr. S. M. Evans), who said that the locations in the industry are all wrong. He dealt with the steel works at Shotton, and as I have lived all my life within sight of the chimneys of those works and know something of them, perhaps I may be excused for reminding the House of what he said:
The astonishing decision to site blast furnaces at Shotton, the headquarters of the Summers Group, and to import iron ore from Birkenhead, necessitating a 20 mile overland haul, is striking proof of the degree to which the Federation's reconstruction proposals have been shaped by vested interests."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 104.]
This is a very interesting statement, and I hope that we shall get some further illumination about it. There are bound to be various considerations put forward on the location of any site. Shotton was chosen because it is near the port of Liverpool, there is an abundance of water, it is close to coal, has an adequate labour force and is close to the resources of scrap from Lancashire. I understood from the hon. Member that if he had his way there would be no further development at Shotton. Although there is a new continuous strip mill there, the proposal to put blast furnaces there is not to be proceeded with if the hon. Member has his way. It will not be a lot of consolation to the constituents of my hon. Friend the Member for Flint (Mr. Birch) or to my own constituents who work at Shotton if they are now to understand that what the bright, brave world of Socialism has to offer them is the ultimate closing down of their iron and steel works. As to prices, is there any allegation made

against the industry on the ground that its prices at present are unsatisfactory? Are the Government going to stop the tariff and what is called the subsidy? We shall be interested to hear what the Government have to say on those points.
The hon. Member for Brigg (Mr. E. L. Mallalieu) mentioned labour relations. He said that labour relations in the portions of the industry which he named were worse than they had been for 20 years. I do not doubt that the hon. Member believes that to be true, but it is contrary to the evidence which has come from all sides of the industry. I will not repeat what my right hon. Friend the Member for Aldershot quoted to the House as said by Mr. Lincoln Evans, but I would remind the House of what has been said by one who has practical knowledge of this industry, the hon. Member for East Swansea (Mr. Mort), who, on both occasions when he addressed the House on this matter, gave a very different picture from that given by the hon. Member for Brigg.
We are told that the industry must be nationalised because of divided loyalty; that it cannot go on as at present because, if it did, there would be divided loyalty. The Minister talked of schizophrenia. I thought that was an unfortunate subject for him to mention because, as was pointed out in one of the papers today, there can be schizophrenic arguments just as there can be schizophrenic individuals. There can also be schizophrenic Cabinets because, when the right hon. Gentleman the Minister of Health spoke at Hull on 18th October last year, he said:
We will not leave the industry in the hands of those who have betrayed the nation's needs and cannot be trusted to develop the industry to the extent required by our necessities.
On the same day, the Minister of Supply was speaking in Cardiff and, talking about production running at extremely encouraging rates, said:
The results augur well for the strenuous and difficult task lying ahead of the steel industry, that of achieving the challenging target set by the Prime Minister of 14 million tons for 1948.
In view of that, one cannot help feeling that in introducing this Bill his voice is the voice of Jacob, but the hand is the hand of Esau. I submit there has been no evidence at all of the operation of this so-called divided loyalty. During the


period we have had the set-up of the Steel Board, there has not been any instance which the right hon. Gentleman can give of divided loyalty having any bad effect upon the public interest. The case for this Bill is not made out.
It does not remain there. There is the question of the case against the Bill. I believe that this Bill will do a great deal of damage to the present situation in the industry. I agree that a fine job of work is being done by men, managements and by the Federation. I admit to the Parliamentary Secretary that I think that the Unions officially and many of the men do favour nationalisation, but I would also tell him that many are doubtful and many are against it. However, during the past few years there has been a coalition between management and workers on that subject, and that controversy has been barred as far as possible in the industry. This Bill will end that coalition, and these bitter arguments about the past—the sort of speech which the hon. Gentleman made—are bound to be introduced into the works and into the plants.
I do not offer that proposition on my own authority. My right hon. Friend the Member for Woodford quoted from the current issue of "Man and Metal" the journal of the Iron and Steel Trades Confederation. The sentence which my right hon. Friend read dealt with the vesting date of 1st May, 1950, involving steel nationalisation being a major issue at the next election and saying that the writer would have preferred it otherwise. The writer goes on:
No one intimately associated with the industry which, whatever other faults it may have had, has always conducted its affairs with dignity and propriety, can be anything but deeply disturbed at the thought of it becoming the centre of a turbulent commotion created to satisfy the egotism and ambitions of the vociferous.
[Interruption.] I admit that the union is in favour of nationalisation. I have never attempted to suggest anything else and said so a moment ago. But as for the meaning of who are the "vociferous," at one time, judging by the test of loudness of voice, I thought it might well be that the Chancellor of the Duchy was referred to. If, however, it was the most strident voice, then we can think of somebody else; but, having heard the senior Member for Bolton (Mr J. Jones) today,

I am not at all sure that the passage does not strike very nearly home to him. I think that the introduction of that atmosphere, coupled with the effect upon the boards of companies of the penal Clauses contained in the Bill, will do a great deal of harm.
That is the practical argument, but there seems also to be a very strong argument in principle because we are concerned here with the vexed problem of relations between public and private enterprise. We are frequently told from the benches opposite that the large sector of the industry which will remain in private hands must work in amity with the public sector. For my part, I believe that a private business which is run efficiently, produces goods which people want and at the prices and places they require them, markets them efficiently and makes a profit, is fulfilling as good a public service as a public concern which is doing the same thing; and a great deal better public service than a public corporation producing poor quality goods at a lower rate of output, with more bureaucracy, at higher prices and running at a loss, as in the case of the coal industry.
But the two must live together. The Steel Board set-up was a compromise between the two systems and, I think, has been working out in a typically British way by a process of evolution. We had the limitation of exports, the Import Duties Advisory Committee, control by the Ministry and then the Steel Board which was set up by the Government. By those successive stages we had worked out a compromise which enabled the industry to be governed in a proper way, having regard to both private and public interests.
I challenge the Government to deny that that set-up has been a conspicuous success, because in it there is a system of checks and balances. There were the provisions under the Companies Act, and the responsibility of managements to shareholders; the Federation co-ordinating and providing certain common services; there was the Steel Board supervising and advising the Government upon prices and policy; there was the Minister fixing prices and having a large say on policy, the Minister being ultimately responsible to Parliament.
In my submission that set-up contains infinitely more democratic control than


does this business of setting up the Minister as dictator of the steel industry. All this talk that the industry will be in the hands of the people is absolute bunkum, because that will not happen. What we shall have will be a Minister who is, in effect, the dictator of the industry. He can be questioned in Parliament, but under very great limitations. I suppose that there will be an annual review in which he will read out a long statement; that global accounts will be presented and it may be said that at the General Election the Minister can be turned out—but the General Election will be fought on a great many other issues. The people will have infinitely less say in the running of the industry and far less information about its running than at present.
To my mind the Government at present are power drunk. They want to have an all-powerful concentration at the centre; a little group of oligarchs—"We are the masters now"—flanked by the Patronage Secretary and supported by the obsequious majority behind treading all together in unison the totalitarian road. Socialism cannot work efficiently without the power to compel, and ultimately this country is bound, if it continues on the Socialist path, to adopt some form of totalitarianism. I believe that if this Bill is passed it will be a very ill day for the men in the industry, for the consumers of the goods produced by the industry, and for the whole nation.

9.0 p.m.

The Chancellor of the Exchequer (Sir Stafford Cripps): I propose first to deal with certain financial matters which have been raised on this Bill, particularly by the right hon. Member for Scottish Universities (Sir J. Anderson) who, I may say, made the most Conservative speech we have heard in the course of the Debate, including urging us to upset customs which have been maintained for over a century. Then I hope to offer to the House certain general observations upon the arguments which have been put forward in support of and in opposition to the Bill.
I shall first deal with the principal criticisms which have been made as regards the compensation provisions. I think everyone will agree that the fairest possible way to compensate shareholders for what they are having to give up is

to pay them the amount which would be realisable at the dates taken for fixing values in an open market as between a willing seller and a willing buyer. The right hon. Member for Scottish Universities sought to introduce a purely artificial distinction between what he called rights and assets. The truth is, of course, that in every single case shares are backed by both, and the case which he gave, and in which he admitted that the share valuation was a fair method, of the railways, is absolutely indistinguishable from the steel industry. The assets are of much the same sort in the two cases and the relationship between assets and rights in the two cases are wholly indistinguishable. I should like to know, if the right hon. Gentleman were here, whether he thinks this system of paying specially for shares which have assets behind them should be adopted in Death Duties, as well as in other matters.
The first important fact to note as regards compensation is that alternative dates have been offered so as to avoid any possibility of it being argued, or felt, that there was some unfairness in taking a date slightly after the announcement of the policy of nationalisation. That alternative date is prior to the General Election and, therefore, the value at that date cannot have been affected by any of the incidents mentioned by hon. and right hon. Gentlemen opposite. In the case of the great majority of stock that has to be dealt with, the shares are of course quoted on the Stock Exchange. The proportion of quoted to unquoted by value is, taking nominal value, £134,500,000 quoted as against £24,250,000 nominal value unquoted, and this particular market in steel shares has been a very active market. If the Stock Exchange price is a fair price as between a willing seller and a willing buyer in an open market, these recorded values are not only the most convenient and expeditious way of arriving at the face value, but they are also the fairest to use for that purpose.
The question therefore arises as to whether Stock Exchange prices of these various classes of security were fair as between a willing seller and a willing buyer in a free market at the date stated. Prima facie, of course, the answer is certainly yes, as is illustrated by the right hon. Gentleman's remarks on the railway shares.

Mr. Nigel Birch: What about Tillings?

Sir S. Cripps: No one on or off the Stock Exchange would say that as a general matter the prices there paid did not represent at the date on which they were paid a fair price in a free market, or that either the sellers or the buyers were not willing to sell or to buy. If the hundreds of holders who every week willingly sell iron and steel stocks and shares regard Stock Exchange prices as a fair basis of exchange when they sell to other investors, why should those prices suddenly become unfair and altogether unreasonable when holders are required to sell to the particular entity, the Iron and Steel Corporation?
An extraordinary argument was put forward by the right hon. Member for North Leeds (Mr. Peake) that sellers of shares on the Stock Exchange were not willing sellers because they wanted to realise their holdings in cash. Surely if that point was correct it would eliminate what is meant by a willing seller. Surely a willing seller is one who has not to be induced by a specially high price because he does not want to sell, just as a willing buyer implies one who wishes to buy and, therefore, does not hold out for an unduly low bargain in order to induce him to buy. The reason why a seller may be selling or a buyer buying is absolutely irrelevant. Reasons will be almost as many as there are transactions, but broadly it will always be because the seller wants the money and the buyer wants the shares.
If, therefore, any argument is to be raised as to the unfairness of this method of arriving at the value of shares, it can only be on the basis of such exceptional circumstances affecting these particular securities generally, or affecting all securities at the particular times which were chosen. Let me first deal with the particular times. As to the pre-election period in 1945, no one suggests that there is anything abnormal, and certain securities will get the benefit of higher prices then ruling; but the majority will almost certainly get the benefit of the higher, prices ruling in October, 1948. As regards this latter date, the argument is put forward, first, that owing to the voluntary limitation of dividends the price was depressed. That is a general point because the limitation was general.
Secondly, it is argued that in anticipation of nationalisation proposals prices were lower than they would otherwise have been. That is a special point relating only to steel shares. Thirdly, it is argued that in a number of cases, the position of which has been analysed, the number of years' purchase of profits given by the Stock Exchange prices is not sufficient to cover both goodwill and assets. That is an individual case relating to certain companies only. Let it be remembered, though it often seems to be forgotten, that compensation must be fair to both sides. Compulsory acquisition is not an occasion for a particular class of property owners to gain some special advantage from the community as a whole. There is no question of damages for compulsory acquisition. It has been universally accepted for the last century that compulsory acquisition should be on the basis of a fair market price that is fair to both sides.
The right hon. Member for the Scottish Universities really based his argument on the supposition that something extra should be paid for those shares because the sellers were not willing—so he said, as he will see when he reads HANSARD tomorrow.

Sir J. Anderson: I based my argument on the proposition that the compensation should be compensation for the assets that would be taken over, not for shares.

Sir S. Cripps: I am afraid that the right hon. Gentleman was not here when I dealt with that.

Mr. Birch: The right hon. and learned Gentleman did not deal with it at all.

Sir S. Cripps: I will not go back to it again, but that was completely disposed of by the right hon. Gentleman's argument that he agreed as regards railway shares that it was a fair way but not as regards steel. I am pointing out that no argument is possible for the payment of anything extra here because the sellers did not wish to sell their shares, but were being dispossessed of them under this Measure. It has been the universal practice in these cases to give a fair market price, and nothing more.
I might here observe that the original investors in these securities will not do so


badly. Eliminating the duplications of capital where one company owns that of another company, the total which will be paid for quoted securities is £243 million in respect of £134,500,000 of paid-up capital. On the average, £101.6 will be paid for every £100 of loan stock; £1 10s. on the average for every £1 Preference share, and £2 6s. 8d. on the average for every £1 of Ordinary stock. It is also interesting to note in the case of Ordinary shares——

Mr. Churchill: Would the right hon. and learned Gentleman mind going a little slower? He is giving a very tense and clear cut argument and we all want to follow it carefully.

Sir S. Cripps: It is also interesting to note in the case of Ordinary shares that the October, 1948, prices were, on the average, the highest that have been realised over the last ten years, ten years I may say in which the steel industry has been very heavily and fully occupied under conditions of exceptional demand. The right hon. Member for the Scottish Universities suggested as an alternative to this method of valuation that valuation might be made upon the net maintainable revenue and he seemed to suggest that that would give asset valuation——

Sir J. Anderson: Or some other realistic basis.

Sir S. Cripps: I do not mind what other, the right hon. Gentleman mentioned that one.

Sir J. Anderson: That is the problem of the Government.

Sir S. Cripps: All I am pointing out is that that is not asset valuation; that is valuation upon the prospects of the future business of the company, irrespective of the value of its assets, and does not in fact produce any different kind of valuation than the Stock Exchange valuation itself. So there can be no argument now based upon the asset point, if the right hon. Gentleman would be prepared to accept the net maintainable revenue basis.
Let me come to the general point of the voluntary limitations of dividends. We are here dealing with securities that are in an active market practically all paying a good rate of dividend. The yield of equity holdings over the whole

field averaged 5.2 per cent., and there are many people who think that a quite high enough return in the circumstances, and that in any event additional earnings above that ought to be ploughed back into the business. The voluntary arrangement as to dividends was expressed at the time as an alternative to some other arrangement, and it is for sellers and buyers to assess the likelihood of the continuance of one or other method of limitation of dividends. Some may put the possibility high, others may put it low.

Mr. Churchill: What possibility?

Sir S. Cripps: The possibility of the continued limitation, voluntary or otherwise, of dividends. But this is only one of the dozens of factors that affect the minds of buyers and sellers. The increase of reserves is another, forecasts as to the selling price of steel, as to the continuance of subsidies, as to the degree of protection that the industry is likely to get. All these matters, and many others, come into play, and quite rightly, in fixing the price between willing seller and willing buyer. It is the whole future probabilities as to the earning power that affects the price on the market, and that is why price is a fair criterion of the value of the share.
One thing is quite certain, and that is that the voluntary limitation of dividends did not in fact depress the price of industrial shares as a whole. Taking 31st December, 1938, as 100 for an index figure, then at the end of February, 1948, the month during which the Prime Minister made his statement, the index of the Ministry of Supply for the prices of industrial shares generally was 149.6, which was practical identical with the figure of the previous October, though of course there had been fluctuations in between.

Mr. Osbert Peake: Whose index?

Sir S. Cripps: The index of the Ministry of Supply, which is far more accurate than that of the actuaries which contains only 18 steel companies, and only nine in the list of 107.

Mr. Churchill: The right hon. and learned Gentleman is dealing with the whole field?

Sir S. Cripps: The whole range of industry.

Mr. Churchill: Could the right hon. and learned Gentleman give us the figures relating to steel?

Sir S. Cripps: I intend to. The right hon. Gentleman will see what striking proof they give of the inaccuracy of his argument. By the end of May that figure had gone up to 161.7 at which figure it stood, after a series of fluctuations, on 22nd October last. That may well have been due to the fact that the wise restraint to be exercised voluntarily by the industrial companies in distributing their profits made purchasers realise that they would be buying shares with more capital investment or more reserves in them, as in fact in most cases they would be. There is no question here of limiting profits. It is the distribution of profits that is limited. The buyer would presumably judge the earning capacity of the company by its total profits, and the stability and value partly by the reserves that existed.
There is, therefore, neither in fact nor in theory, any justification for a general attack on Stock Exchange prices as under-valuing industrial securities as a whole at this time, and I have not yet heard such an argument put forward in the case of Death Duties. Limitation of dividends should, in fact, as it did, increase the capital value of industrial securities, particularly if it is thought that these limitations will eventually come to an end.
Let me now pass to the particular case of shares in steel undertakings. Here it is said that owing to the threat of nationalisation there was a depression of the prices. This so-called threat has hung over the industry since the last General Election so that, if it was a fact that the threat affected these shares in particular as distinct from the rest of the industrial shares, we should find that the steel shares had reacted less well to the improved industrial position than the other industrial shares. But that is not the case. Taking the same dates for steel shares as those for all industrials including the steel shares as well, we get these comparative results. At the end of October, 1947, steel shares were 142.6; others were 149.8. At the end of February steel was 151.8; others were 149.6. Steel has passed the rest.

Mr. Peake: Whose index is that?

Sir S. Cripps: It is the index of the Ministry of Supply.

Mr. Peake: Would the right hon. and learned Gentleman say whether this index is open to the general public or whether it is a private thing which the Government keep?

Sir S. Cripps: It is an index which is rather more inclusive and more accurate than others which are kept.

Mr. Churchill: The right hon. and learned Gentleman has not answered the point. The whole point is whether this index is open to the public, or whether these are some figures of which the right hon. and learned Gentleman enjoys a State monopoly?

Sir S. Cripps: It is not a public index. Anybody who wishes can check it: anybody can take the steel companies which are included in the list and work out the quotations in it. At the end of February, 1948, as I stated, steel was 151.8 and other shares were 149.6. At the end of May, 1948, steel was 166.9 and all industrials were 161.7. At the end of October, steel was 173 and others were 161.7.
That shows quite conclusively that, compared with other industrials, steel shares certainly were not depressed because of nationalisation. It certainly shows that they have reacted more and not less favourably than other shares in the general market. Indeed, one of the matters that caused us to hesitate as to the propriety of taking the October, 1948, figures was the admitted speculation that took place in steel shares, driving up their quotations in the middle of that month. Let me here quote the "Financial Times" of the 15th October:
Yesterday's near-boom conditions in Iron and Steel shares reflected a gamble, pure and simple. Buyers are gambling on the contents of the coming Nationalisation Bill.
I think that disposes of the argument that there was some special factor adversely affecting steel shares. That speculation, fortunately, was short lived, so that it did not very seriously interfere with the monthly average, though it did increase it somewhat above what it would otherwise have been. Actually, these were the index figures: 1st October, 164; 13th October, 170; 14th October, 176; and 25th October, 173.5, showing the speculative rise. Of course, if we are to go into these special


circumstances affecting shareholders of the steel industry, we must look at all of them, not some of them. Let me recall to the House a few more.
The industry has, in the past, received very special State protection. In 1932, as has been said many times, there was a protective tariff on iron and steel of 33⅓ per cent. ad valorem, which was very high, compared with the normal 20 per cent. in those days. In 1935, specific duties on finished and semi-finished steels were introduced, with the effect that the lower priced products had what amounted to a 50 per cent. ad valorem duty. Then came the series of adjustments, with negotiations and restrictions of imports, that we have been reviewing from time to time, until the steel industry got back into the time of good demand, which began when rearmament began, when protection was superfluous. All that gave an artificial stimulation to the steel industry by State action and at the cost of consumers generally. It enabled higher prices to be charged in the home market, and there is no reason to compensate on the basis of a return to this system of special protection if and when the market for steel becomes easier.
In 1933, the average earnings, after paying debenture interest, were 1.6 per cent. Actual steel production in this country was then probably being carried on at a loss. No dividend was paid on a very large amount of capital in the iron and steel industry in 1932. At the present time, earnings are temporarily high owing to the world shortage of steel, and it is, indeed, a fortunate incident for the shareholders that the State should pay compensation in this period of artificial prosperity.
The truth is, of course, that, as regards any share or stock, we can always isolate one factor and say it is unduly depressive or that it unduly raises the price, but the whole basis of a fair market value is that people who deal in these shares and those who advise on them take all the factors into account, both favourable and unfavourable, and fix that fair price having regard to these factors. If it is said that, taking the share price of a particular company, the buying public has made an estimate that is too low, because it does not take enough account of goodwill and assets

then shares ought to be sold at a day to day valuation and not on the free market as between willing seller and willing buyer. If the market price is fair for one company, it is fair for all.
Does anyone really imagine that, with all the highly skilled operators on the Stock Exchange, somehow or other, they all overlooked what are now thought to be the true factors of the financial position of certain steel companies, and so uniformly and consistently under-valued those shares that the sellers have been equally uniformly prepared to accept that undervaluation?

Mr. Churchill: I hope that before the right hon. and learned Gentleman leaves that point, he will deal with this broad point, because I have tried to follow with great attention the brilliantly able argument he has unfolded. It was masterly in every way, but, at the same time, will he deal with this particular point, that there should be an arbitration on the principles to be adopted in regard to compensation?

Sir S. Cripps: I will deal with that point in a moment. Any assumption such as that which I have just put before the House, makes, of course, complete nonsense of the Stock Exchange as a place to exchange stock.
It was suggested by the hon. and learned Gentleman the junior Member for the Combined English Universities (Mr. H. Strauss) that the Stock Exchange price was not a suitable valuation where the entire shareholding was being taken over, and that, in such a case, the assets should be valued. There is, of course, no logic whatever behind such an argument; it is merely intended to suggest a way by which, possibly, a higher price might be paid. In fact, if all the assets of these 107 companies were put on the market at the date of taking over, they would realise very little indeed, and it would be an extremely bad deal for the shareholders.
There is one further factor to which attention is being drawn, and that is the undertaking given by my right hon. Friends and my own predecessors as to capital expenditure incurred after the announcement in May, 1946. This capital expenditure is, of course, perfectly well known to those who operate on the Stock Exchange, and is just as much re-


presented in the October, 1948, share values as is any other incident which goes to make up that value. Similar expenditure is, of course, proceeding in hundreds of companies of all kinds throughout all industries, and it has never yet been suggested that in buying the shares of such companies, or valuing them for taxation purposes—the I.C.I. shares for instance—the purchaser or taxpayer should pay some special bonus in respect of recent capital development.

Mr. Lyttelton: Will the right hon. and learned Gentleman admit that, on his own argument, the valuation of these shares should take account of the Government's pledge to reimburse the disbursements concerned?

Sir S. Cripps: If any such pledge had been made, it would, of course, have been perfectly reasonable for those dealing in the shares to take it into account. If it was taken into account, that, of course, disposes of it. The fact that all these incidents are included in the price of the shares makes the share price the satisfactory price for the purpose of such a transaction.
Shares are sold on the basis of past history, present experience and future hopes of business, and there can be no possible justification for adding anything to the free market price for any reason whatsoever. As a matter of fact, the new capital expenditure that has been referred to has largely been covered by moneys borrowed by various companies either by new issues of stock which will be bought up by the Corporation, or else by borrowings which will be taken over as continuing debts. The F.C.I. alone has lent over £50 million for this purpose. But that fact does not alter the validity of the main argument that everything belonging to or affecting the business of the company as at October, 1948, is fully taken into account in the price of the shares.
The analogy which one hon. Gentleman put forward of the Coal Bill, of course, is no analogy at all. In that case compensation was by valuation of assets based on the facts as they existed prior to the date from which capital expenditure was refunded. New capital expenditure had to be taken into account, therefore, outside the valuation. It is, no doubt, because of that then known method of fixing compensation that an

assurance was given that whatever method of compensation was adopted, it would be such as to include the incidence of capital investment after the date of the announcement, and, as I have pointed out, that is achieved by the method which we have adopted.
The right hon. Gentleman asked me why in those circumstances we should not go to arbitration as the most satisfactory method of settling compensation. There is no reason that we can see why that precedent should be created. It has never, never yet been created by Parliament who have hitherto always thought themselves fit to determine this point. I agree with the right hon. Member for the Scottish Universities when he said that it is always important to act justly, but it must be justice to the community as well as to the property owners.
We are convinced, after a thorough examination of the situation, that the prices which will be paid are arrived at in the fairest way for both parties, though frankly, as representing the general public in this matter, I feel that the shareholders are getting a very favourable deal here, particularly for the two reasons which I have mentioned: First, the artificially supported prices pre-war, merging into the very exceptional period of high demand during and since the war, which has inflated profits and which does not seem to me to have been discounted sufficiently by the buying public; and secondly, the fact that the month taken to fix the average price had a marked period of speculative activity which did, in fact, influence the prices upwards. Nevertheless, I feel that this, on the whole fair, and certainly convenient method of appraising the value of the shares is the best that can he found in the interests of all the parties concerned.
I now come to the general argument on the Bill as a whole. I think it can be said that it would be a fair test to put aside any emotional or theoretical arguments one way or the other, and to start without any presupposition that either nationalisation or private enterprise is necessarily better in any particular case; There are, in my view, three major points which tend to show that the iron and steel industry, or at least that part of it with which it is proposed to deal in this Bill, should fall within the public sector


of industry now, and I will say a word or two about each of those points.
First, in the light of the historical development of the industry in this country, I believe that it is generally accepted that a large degree of cartelisation or monopoly of control is required in the iron and steel industry if it is successfully to meet its obligations. That, I think, was fully admitted by the Leader of the Opposition this afternoon. A large degree of monopoly control has, in fact, been built up since 1933 under the Steel Federation. Certainly the Steel Federation considers that the activities of Steel House are not only beneficial but are necessary, and in that proposition I am sure I shall have the support of the right hon. Member for the City of London (Sir A. Duncan). It is perhaps as well to get clear what functions Steel House performs under the benevolent dictatorship of the right hon. Gentleman. They are not dissimilar—and I think he would not dissent from this—from those laid down in Clause 3 of the Bill. But with this difference, that the Steel Federation is a producers' combine, primarily concerned with the producer's interest.
In those circumstances, we have to decide whether such a large measure of industrial control by private interests is consistent with present day democratic government. When a private monopoly control reaches the magnitude of that in the iron and steel industry, and thereby the power to influence the strategic requirements of the State and the interests of a large proportion of our main industries, it is not right, in my view, that it should be perpetuated. Parliament must be able to supervise this vital section of our industry in the interests of the nation and of the consumer. In other words, the time has come when the size, importance and structure of the steel industry demands the change from private to public monopoly control. It is not a question as between uncontrolled private enterprise and national ownership, as the right hon. Gentleman admitted in his speech, but between the private or public control of a vital industry.
It is true that the right hon. Member for the City of London is a Member of this House, but unfortunately he sits on the wrong Front Bench to allow him to be

questioned by hon. Members as to the policies the Federation carries out, and yet it must be admitted that those policies must have a very profound effect upon our national prosperity and security.

Viscount Hinchingbrooke: What chance will there be of questioning a Minister? None at all.

Sir S. Cripps: I can assure the hon. Member that the chance will be much better than it is at present. Mr. Speaker has given a Ruling on this matter, and he certainly would not have ruled that a Question could be put to the right hon. Gentleman the Member for the City of London. Is it right that the Members of this House and the people they represent should be debarred from any inquiry as to the policies pursued in this matter? Surely there can be only one answer to that question for those who believe in democracy.

Mr. Churchill: I thank the right hon. and learned Gentleman for permitting me to intervene. Is it not a fact that the Bill provides that there will be only one day in the year on which the Corporation's affairs can be discussed, that no Questions can be addressed and there will be no means of raising the subject by prayer or petition?

Sir S. Cripps: The right hon. Gentleman has pointed out that there will be one more day in future than ever there has been in the past. That is, of course, not the actual position, because the Minister can be questioned upon matters arising, exactly as other Ministers can be questioned on matters of policy which arise in connection with nationalised undertakings. It seems to me that this shows conclusively what a decisive point this is. [HON. MEMBERS: "Hear, hear."] It is good, at least, to get agreement on this matter on both sides of the House—that it is essential that in the future we can have the right to ask questions about the steel industry. The only way we can do that is by nationalising the steel industry.
That leads me to the next sentence of my notes, which says that this seems to me to be decisive so far as the issue of the nationalisation of the steel and iron industry is concerned—and I gather now that the whole House is in agreement. Of course, the only answer to this argument


that I have put forward could be an assertion that all controls should be done away with and that free competition should be reverted to. But in the light of past experience and the present necessities of reconstituting the industry in large, up-to-date units, such an assertion lacks all reality, and I do not think it has really been put forward by anybody in the course of the Debate.
This leads me to the second point, which is that, now we are seeking to have some measure of foresight in our economic activities, we must be able, so far as certain basic matters are concerned, to plan ahead for production. The whole of our capital investment programme, of our programme for investment overseas, including that in our overseas territories—which is a large part of our export business, depends upon supplies of suitable qualities of steel, and we must be able to plan this most important of our economic activities ahead; and that we certainly cannot do if we are to be driven to rely upon the reactions of uncontrolled private enterprise to a changing world situation in which they may demand again the restriction of markets, high prices, international cartel agreements, tariffs, and import restrictions as a condition of making the necessary supplies available to the country.
We cannot allow the steel industry to determine, from the point of view of nothing but its own profitability, the limits of its own expansion. The only entity that can take the risk, in the present highly speculative circumstances of world economy, as to the future size and form of the steel industry that we can build up, is the nation as a whole.

Mr. Churchill: What nonsense.

Sir S. Cripps: However that is to be done, it means that we must have a form of general control or nationalised ownership of the industry, and we must have it now, when the whole course of development over the next decade is being determined. That is one very powerful reason why we cannot wait any longer. I have already explained that the present private monopoly control that now exists cannot be carried on, so that we are left with the one solution of nationalisation.
The third point is the strategic one. We cannot again, as we did before the last

war, leave it to the chances of the interests of private enterprise to determine whether or not we shall have adequate capacity suitably located to provide our defence needs. Just as in the early days of our sea power it was found essential to the national safety for the State to own and run some naval dockyards, so today it is essential for our defence needs that the State should own a large part of the steelmaking resources of the country so that they can be assured that the defence position is always safeguarded.

Mr. Thornton-Kemsley: By people who sold jet propelled planes to Russia?

Sir S. Cripps: Perhaps the hon. Gentleman will allow me to speak, as I am at the Box. We cannot just wait until we find out what is wrong when we next need these resources and then, as we did in the last war, take them all under national control.
There are, of course, many other arguments which have been and can be deployed on both sides, but I believe that the three points which I have put forward are themselves decisive of the issue. Let me sum them up shortly: If, as is admitted to be necessary, there must be a large element of monopoly control in this vital element of our industrial economy, that control must be public and not private. No live and effective democracy can, in the circumstances, decide otherwise. Secondly, so far as foreseeing future capital development is concerned, we cannot take the risk of our steel supplies being inadequate because the industry may not consider it economic from its point of view to risk enlarging its capacity. The State must therefore accept the responsibility which can only be exercised in conjunction with ownership. Thirdly, from the strategic point of view, we cannot risk our defence position.

Mr. Churchill: The right hon. and learned Gentleman is assuming that the House believes that the Government have adopted proper measures to safeguard our defence position, and he has no right to bring arrangements about the steel industry into the forefront of his argument when so much else has been neglected.

Sir S. Cripps: I cannot accept the right hon. Gentleman's invitation to embark on a Debate on defence, nor would I believe it to be in Order, Mr. Speaker; but even if he were perfectly right, there is no reason why we should carry a still further risk in steel.
All three of these considerations make it imperative to decide this matter at the earliest possible moment, because we are now in the formative stage of what will become substantially a new industry, aggregated into much larger units, in the course of the next few decades. In these circumstances, it would be most unwise to allow this issue to hang on undecided. Looking back into the history of the industry, without attempting to allot blame or praise, we cannot but be struck by the unsatisfactory position that has often ruled and the many expedients that have had to be used to try to strengthen it from time to time. Indeed, it is only during this recent period of almost unlimited demand and short supply that it has achieved the stability that has enabled it to put up such a remarkable performance—a stability based on monopoly control by the Steel Federation in association with the Government and including the benefit of large Government subsidies.
It has been suggested by the Leader of the Opposition and, indeed, by the Steel Federation, that the continuance of this joint control might be a solution to the problem. If we were still concerned with a war or immediate post-war situation this might be a tolerable situation. As we emerge into an economy of peace, the whole picture changes and the diversity of interest between, on the one hand, the perfectly proper desire, under the present system, of the owners to make the greatest profits, and the need, on the other hand, of the nation for its great basic supply, diverge more and more, and as that divergence increases it becomes clear that either one or other side must have the last word on policy.
Under the present arrangements that last word must come from the owners. No one can force them into a policy which may entail a large expenditure of their own resources. That is why I do not believe that the present set up, or anything like it, could possibly persist. It would become increasingly necessary either to relax Government controls of

all kinds, thereby risking the national policy, or else to take over the ownership of the industry.
A half-way house may be perfectly feasible in an industry which is not so fundamental to our whole strategic and industrial policy but it is not, in my view, possible or practicable in the iron and steel industry. And this is particularly so when the owners of the industry happen to hold political and economic views the very opposite of those of the Government, as evidenced by the fact that the head of the Steel Federation sits on and speaks from the Front Opposition Bench. This position is not unlike that between this House and another place.

Mr. Churchill: Down with your political opponents.

Sir S. Cripps: When that other place shares the views of the Government as expressed in this House, all is well and everything works smoothly. Quite the contrary is the case when the other place does not share the Government's views. So one might compare the Steel Federation to a sort of Second Chamber in the steel industry which can bring to naught any national policy decided upon by the Government, and that even without any public argument or disclosure of its reasons. The time is past when that sort of position can be tolerated by any intelligent democracy, and let me remind the House that democracy is not so firmly established in the world that we can afford to flout its desires for progress towards a more publicly controlled economy.

Mr. Churchill: Have a General Election.

Sir S. Cripps: There has been too much experience in past times of the misuse of industrial power and of the essential resources of the nation owing to reliance upon the unrestrained operation of the law of supply and demand in association with the equally unrestrained operation of the profit motive. These are, of course, essential factors in our mixed economic activities, but more and more the people demand that they should be brought under reasonable control to ensure that national resources are used in the interests of the people as a whole, and not to increase the wealth and power of any particular section of the population. This


Bill is a step forward in that direction. and will serve to establish that our democratic processes are capable of dealing with the most deeply entrenched sectors of private enterprise, as and when it is in the nation's interest that such action shall be taken.
The opposition to this Bill stems from two main sources—those who believe that private enterprise and free competition are essentially the best ways of serving the national interest and those who resent bitterly this attack upon the citadel of the power of the property owner. As for the first section, that battle was lost long ago when the steel industry itself decided that free competition must be done away with. The whole pre-war history of this industry proves that in this modern world the old conception of unlimited free competition has largely ceased to exist within national units. If this Bill were not to be passed, no one in the industry would dream of reverting to unlimited internal competition.

Mr. Churchill: We have not got it now.

Sir S. Cripps: With the growing appreciation of the inter-relation of the great industries and services in the economic life of the country and of the need for foresight and planning, we have abandoned the conception that unlimited internal competition is always for the best. The whole trend of our industrial organisation is in the contrary direction and we are all constantly urging the need for fuller co-operation, the exchange of ideas, the pooling of inventions and so on, as a better basis for high efficiency than mere competition alone.
The second class of opposition—the protest against this attack on the power of private enterprise—is a challenge to the capacity of democracy to deal with the private industrial empires that have been built up under capitalism. That is a fundamental challenge which we accept. Is it right or wrong, if the nation believes that for economic reasons the steel industry should be nationalised, that that nationalisation should take place; or is there some peculiar right in the owner of

this class of property to have his property preserved——

Mr. Churchill: Certainly.

Sir S. Cripps: —and with it the power of control over the industrial life of the whole country?
I answer those questions without any hesitation by saying that, this challenge having been put forward by private interests, it is essential that democracy should assert its rights, as otherwise it must acknowledge for all time that it cannot touch these citadels of power, and that it is not the electorate but the owners of industrial property who shall determine the economic policies of the country. And the ugly alternative would then be that any such change which is to occur must be brought about by other and more violent means—[An HON. MEMBER: "By gunpowder?"]—and it is because we are preventing that that we say that Socialist democracy is the true barrier against Communism—[Interruption.] I should like hon. Gentlemen opposite—[Interruption.]

Mr. Churchill: Mr. Churchill rose——

Hon. Members: Order.

Mr. Speaker: The right hon. and learned Gentleman is in possession and the right hon. Gentleman must give way.

Mr. Churchill: Mr. Churchill rose——

Hon. Members: Order.

Sir S. Cripps: I should be interested to hear——

Mr. Churchill: You have no right to——

Hon. Members: Order.

Sir S. Cripps: I shall be interested to hear of any case in which Conservatism has proved a barrier to Communism in the same way that Socialist democracy has been.

It being Ten o'Clock, the Debate stood adjourned.

Debate to be resumed Tomorrow.

LONDON-EDINBURGH AIR SERVICE

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

10.0 p.m.

Mr. Willis: I am very glad tonight to have the opportunity of doing something which a short time ago the Opposition were suggesting could not be done—namely, to query on the Floor of the House the actions of one of the nationalised industries. I wish to raise the matter of the withdrawal of the Edinburgh-London air service. This service was withdrawn on 1st November. On 3rd November, in reply to a Question which I put to my hon. Friend, I was told that his noble Friend had approved the decision of B.E.A.C. to withdraw the London-Edinburgh service this winter, since he was satisfied that the service would incur a substantial loss and since the small demand for the service last winter suggested that its withdrawal would not involve any great inconvenience to the public.
The emphasis in that reply was on the profitability of the service, although my hon. Friend, after further questioning, admitted that there were certain technical difficulties involved in the maintenance of the service during the winter. Meanwhile, the chairman of the Scottish Advisory Council, who displays a rather remarkable capacity for confusing issues, has devoted his journalistic talent to persuading the public that the withdrawal of this service has been due, in the main, to the technical deficiencies of Turnhouse as an airport.

Sir William Darling: Who is the Chairman of the Scottish Advisory Council?

Mr. Willis: I think the hon. Gentleman knows the answer to his question as well as I do. The arguments are twofold. First, we have the contention that it is due to the unprofitability of the service, and in the second place that it is due to the technical deficiencies of Turnhouse. I wish to deal with those arguments. It takes some time to create airmindedness in people who are provided with fairly comfortable and convenient alternative travelling facilities, but this was being done in the case of this service. Although

after the first few months of its operation, it fell away again, during the winter of 1947–48, nevertheless the number of passengers has increased considerably. In February, the number of passengers was 392 and by June it increased to 1,032, and I understand that it continued slightly to increase during the next month or two. In view of those figures, I contend that it was a most unbusinesslike decision to stop this service.
To create air-mindedness there must be regularity of service, instead of which, just as people were becoming accustomed to using this service, it was stopped. When the service recommences months will again have to be spent creating that attitude of mind which accepts air travel as the most convenient way of journeying between London and Edinburgh. Perhaps I may read what one of my constituents has to say about this in a letter which I received last week. He says:
As a recent convert to air travel and as a user (three times) of this service this year, I should welcome its return. Many people have said how comfortable the service was, and the point is they, like myself, are just getting used to this form of transport. It seems to me a great pity to withdraw it at a time when the prospects of more regular travellers appear to be greater. When it starts again we shall all have to get used to it again, with an inevitable time lag and lack of patronage.
That is quite true. Not only does the man have to get used to it; he has to persuade his wife to accept the idea that it is quite safe for him to travel by aeroplane.
But matters were made worse by the fact that while the closing of Turnhouse Airport was recommended in August, a month later it was decided to reduce the fare from £14 to £11. This reduction came into operation on 1st October, but before then the Minister had accepted the recommendation of the Scottish Advisory Committee to close the airport at Turnhouse, and to withdraw the London-Edinburgh service. Surely the businesslike thing to have done in this case would have been to have seen what effects the reduction in fare would have on the traffic carried. I am informed that on the day after the reduced fare came into operation 70 of the 84 seats available on the service were occupied. That might have been exceptional; it was on 2nd October, but we do know, if we are to accept the reports in the


Press, that the reduced fare has considerably increased the traffic between London and Glasgow.
We are entitled to assume that the effect which the reduced fare achieved on that route would also have been achieved on the Edinburgh-London route. I suggest that had this service been run in a more businesslike manner, the fare would have been reduced earlier in the summer and a more serious effort made to obtain extra traffic. Had this been done, I am fairly confident that greater traffic would have been obtained, particularly when we remember that for some 10 or 12 weeks from mid-August until 1st November, the train journey was a very wearisome one of 10 hours.
I turn to the second of the arguments, namely the condition of Turnhouse Airport. The argument of the Chairman of the Scottish Advisory Committee——

Sir W. Darling: What is his name?

Mr. Willis: —now seems to be, judging by what has appeared in the Press, that we should feel very happy because the service may be resumed next year, if the Minister gives his consent. Of course, the simple answer to the question of safety at Turnhouse appears to me to be that if it is unsafe this winter to use Turnhouse, then it was unsafe in the winter of 1947–48.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): It was not used regularly then.

Mr. Willis: It was used, and a service was operated during the winter of 1947–48. Let us assume that during the winter of 1947–48 certain navigational deficiencies were discovered. Then they should have been rectified during the summer and not left over sufficiently long to bring about a complete stoppage of the service. It is interesting to notice also that on the day that the B.E.A.C. decided not to use Turn-house, Aer Lingus, carrying passengers from Dublin to Renfrew, had to drop them at Turnhouse, while passengers being carried from London to Edinburgh, via Renfrew, had to be dropped at Preston.
For those reasons, I believe that the decision of the Ministry to stop this service was wrong. It was run, I think, in a most unbusinesslike manner, and, of course, present emphasis on the deficien-

cies at Turnhouse only serve to show that the proper development of Turnhouse has been neglected. It is somewhat ironical to recall that the first report ever prepared on the provision of civil airfields in this country, a report that appeared in 1919 by General Sir Frederick Sykes, then Controller-General for Civil Aviation, placed Edinburgh at the head of a list of 10 centres in the country at which it was considered necessary to have proper airport facilities.
Thirty years have passed since then and we still have not got at Edinburgh proper airfield facilities. I believe that today Edinburgh is the only capital city in the whole of Europe without a single air service. We should like tonight to have some assurance from my hon. Friend that Turnhouse will be made capable of operating a winter service quickly, that the London-Edinburgh service will be resumed at the earliest possible date and that Edinburgh will, in the future, receive the attention which, as the capital city of Scotland, it deserves.

10.13 p.m.

Mr. Rankin: Whatever difference may arise between Glasgow and Edinburgh on the proper dress of its civic heads on ceremonial occasions, I want to assure my hon. Friend that no such difference exists on this occasion. I think that he has presented a fair and reasonable case for the resumption of this service. I wish to pursue one aspect that he touched upon, namely, the profitability of the service. I think that is a most important point, and I suggest that the whole fare structure of the internal services of B.E.A.C. ought now to be the subject of very close scrutiny.
We have altered the pitch of the seats in the Dakota aircraft which we are now flying and as a result, these aircraft are now able to carry 28 passengers. The fare has been reduced to £11, and a great deal has been made of that; but I want to say—and I am not saying it as a Scotsman—that the fare is still too high and ought to be reduced still further. The running costs of a Dakota machine between London and Glasgow and Edinburgh cannot exceed £90. I am not certain of the exact figure but I am basing it on the Viking cost, which is £60 per hour. A Dakota must be running at a total expenditure of £90 for the journey.


If we get a pay-load of 70 per cent., then the revenue on that journey is £110, and £90 is an all-in cost, which leaves a profit of £20 on the journey. If we take a 100 per cent. pay-load—which we want and which we can get when the fare structure is made a proper one—then the revenue for that journey is £154 for an expenditure of £90.
Those figures are fairly accurate. I do not say that they are completely accurate. They are my figures—I alone am responsible for them—but they are not far wide of the mark. I suggest that there is a case for a further reduction in the internal fares, which are not governed by the International Association's fare charges. When we have a reduced fare, then I am certain that we will realise another aim which I hope is the aim of everyone interested in civil aviation—a service between London, Glasgow and Edinburgh every hour.

10.16 p.m.

Lieut.-Commander Clark Hutchison: The hon. Member for North Edinburgh (Mr. Willis) dealt adequately with the present unsatisfactory state of the Edinburgh-London air service and with the meanderings of Sir Patrick Dollan, Chairman of the Advisory Committee. I do not think I need follow him on that. I wish to ask the Minister one question. When this matter arose at Question Time on 3rd November, he happened to mention that passengers were taken from Edinburgh to Renfrew by motor coach. I expressed some surprise at that statement. So that we may get this matter in the proper perspective, can the Minister give some figure to show how many passengers per day or per week are in fact taken from Edinburgh to Renfrew in order to fly to London?

10.17 p.m.

Mr. Niall Macpherson: Can the Minister indicate the inter-relationship of the price policy and the time schedule. I have always said that it would be impossible to defend the extra price of air services as compared with road services unless it was possible for a business man to travel to Edinburgh and back on the same day. I still believe that that is the case. I believe that had the price of the service been lowered for the summer months sooner, that step would have been justified by increased traffic.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): In reply to the straight question asked by the hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison), I must say that without notice I could not give details of the number who travelled by road. At the moment, I take my information from the Scottish Press, which states that there is a morning and evening service by road, and that there is an intention to provide road facilities for a mid-day service. I will get the information and send it to the hon. and gallant Gentleman.

Lieut.-Commander Hutchison: If I put down a Question, will the hon. Gentleman give me the details?

Mr. Lindgren: Yes, with pleasure. I will now deal with the points relating to the withdrawal of this service. Let us be perfectly frank at the outset. The fact is that Edinburgh simply has not supported the service. Even in the summer months, the load factor was so low that we could not make a profit and the service ran at a loss.

Mr. Willis: Can my hon. Friend give the figures? I have the figures until June. Will he give the figures for the next three months?

Mr. Lindgren: Yes. The details of scheduled passenger traffic are: for July, 1,031; for August, 1,288; for September, 1,194; and for October, 954. There was a drop in October even though the fares had been reduced. I say with all respect, not only to Edinburgh but to every part of the country where an air service is provided, that if the people want that service to be maintained they must take some interest in it.

Mr. Willis: I am sorry to interrupt, but this is an important matter. I understand that the figure of 1,032 for June represents roughly 50 per cent. of the pay-load. The passengers carried in August represent over 60 per cent. of the pay-load. What must be the percentage of the load before the service pays?

Mr. Lindgren: If we could maintain a steady load factor of 70 per cent., we could break even and indeed show a profit, but unfortunately we never did get a 70 per cent. load factor on the Edinburgh service. As soon as it was publicly


announced that the service would be withdrawn, use of the service by people in Edinburgh began to increase, but the decision to discontinue the service was made because of the very low load factor during last winter. That low load factor during the winter was partially caused, I quite agree, by the unsatisfactory condition of the airport. It is not up to Dakota standard, and is something of a fair weather airport.
I have the greatest sympathy with the traveller and, if we are to maintain a good load factor with our air services, the passenger must be able to depend on regularity. It is hopeless if an Edinburgh business man, having an important engagement in London at 11 a.m. and going to the Edinburgh airport to catch a plane at 8 a.m., finds that it is not taking off. If he does that two or three times, he will in future play for safety, book a sleeper, go by train, arrive at King's Cross, have a bath and breakfast and so be certain to be ready for his appointment. This tendency towards irregularity creates the greatest problem in the mind of the intending traveller, and his reaction is evidenced by the decreasing pay load. Even during this summer the load factor was irregular, and we could not guarantee regularity for the coming winter, and so decided to withdraw the service.
Then my hon. Friend quite rightly put the point that we have withdrawn the service for this winter, although, in fact, we ran it last winter. It is perfectly true that we ran the service then, but the load factor was down to 15 or 18 per cent. and never once during the winter months went above 20 per cent.

Mr. Willis: The fact is that the Ministry ran the service last winter, whereas the argument now is that they cannot run it.

Mr. Lindgren: No, Sir. We could run the service in exactly the same way as we ran it last winter. We could run that service if, in fact, the conditions were such that we could get into the airport, but the mere fact of irregularity of the service causes a low load factor, and it is the British taxpayers' money with which we are playing. [An HON. MEMBER: "And the Scots."] Yes, the Scots contribute, but so do our good friends from Wales who do not get an air service at all. My noble Friend did not feel pre-

pared to justify, either to himself, this House or to another place, the continuance of this service which he knew was going to run at a very heavy loss during this winter.

Mr. N. Macpherson: Can the hon. Gentleman say what the regularity was during the winter?

Mr. Lindgren: During the summer, it was practically 100 per cent., but in the winter it was worse owing to the weather. It is an unfortunate fact that we cannot determine what sort of weather we are likely to have. I will, however, give this guarantee to the House. The service will be recommenced next spring or summer, and the intention is to start in March or April ready for the spring and summer schedules. Certain alterations will have to be carried out at Turnhouse to make it possible for winter services to operate regularly. However, I must give the warning that, unless the load factor is satisfactory during the summer months, the service will again be withdrawn in the winter, because if we cannot get a satisfactory air service between Edinburgh and London, one which will show a reasonable load factor in summer when traffic figures tend to be at their highest, then we shall not have a service in the winter. My noble Friend is not prepared to run services to Edinburgh which entail a considerable loss.
My hon. Friend referred to the fact that 30 years ago Edinburgh was declared by the Director-General of the Air Services to be a place suitable for an airport. May I be forgiven for calling attention to the fact that the representatives of Edinburgh, some of whom have had a great deal to do with the municipal conduct of that city, did nothing about it. They had all the necessary local government powers, and successive Conservative Air Ministers urged them to do something about providing an airport for their city.

Sir W. Darling: The City of Edinburgh employed a specialist in the design of airports to prepare a plan for such an airport, but it was finally condemned because it was unsuitable. We appealed to the Air Ministry for their guidance, but we got nothing more from them than we are getting tonight.

Mr. Lindgren: I do not know when that was; I am not one to start a war between Edinburgh and Glasgow.

Sir W. Darling: I do not think the hon. Gentleman could.

Mr. Lindgren: I know they all love one another like real blood brothers. Whether we think of Glasgow or of Renfrew, there were even greater difficulties in regard to the provision of an airport in that area. But Glasgow has now an airport which is not altogether satisfactory from the point of view of weather and its approaches, but it is one which will give a more regular service than Edinburgh. The topography of the ground, so far as Turnhouse is concerned, makes it most difficult. It requires a low approach, and we are carrying out experiments with back markers on the S.B.A. approach system, and also considering the lengthening of one of the runways.
This matter has been fully discussed and agreed in Scotland. It is not an armchair decision from someone in London. Scotland asked for, and was given, a measure of local autonomy in regard to these services. The proposal was put to the Scottish Advisory Council, and there was very considerable discussion. If I read "The Scotsman" of 8th November rightly, the Lord Provost of Edinburgh, who put up an excellent fight for retaining the service on both the Scottish Aerodromes Board and the Scottish Advisory Council, now agrees, with all the facts before him, that the correct thing to do is to withdraw the service. I promise that the service will be recommenced if the City of Edinburgh and the surrounding district are sufficiently enthusiastic about it and if it gives us the load factor.

Question put, and agreed to.

Adjourned accordingly at Twenty-nine Minutes past Ten o'Clock.